Volvo celebrates $887m green push
Volvo Cars has won support for its plans to develop more electric vehicles (EVs) and cut its emissions raising €500 million (NZ$887m) through a green bond.
The company’s first green bond – a type of fixed-income instrument earmarked to raise money for climate and environmental projects – will fund the design, development and manufacturing of fully electric cars.
Carla de Geyseleer, chief financial officer, says the bond issue was oversubscribed five times and supports Volvo Cars’ recently established Green Finance Framework.
“The financial community has a critical role to play in supporting sustainable development, including the transition to a low-carbon economy,” she explains. “In this respect, it’s very encouraging to see so much investor interest in helping us electrify our fleet and deliver on our climate ambitions.”
Volvo Cars aims to become climate-neutral by 2040 under a plan launched in 2019 that addresses carbon emissions across all its operations and products.
As well as addressing exhaust emissions through the electrification of vehicles, the company will tackle carbon emissions in its manufacturing network and wider operations, its supply chain and through recycling and reuse of materials.
Among the marque’s goals is to reduce its lifecycle carbon footprint per car by 40 per cent between 2018 and 2025. This includes a 50 per cent reduction in exhaust emissions per car, a 25 per cent reduction per car in operational carbon emissions, including from manufacturing and logistics, and a 25 per cent reduction per car in supply chain carbon emissions.
The green bond will mature in October 2027 and pays a fixed coupon of 2.5 per cent.
