ESG & Investing
Investors Wary of Greenwashing in Japan’s $140 Billion Bond Plan
- Government aims to sell “GX” bonds to fund low-carbon plans
- Ambiguity around name of new debt is seen deterring investors
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The Japanese government faces a challenge in one of its landmark climate-change initiatives, a new type of sovereign debt to raise funds for the country’s decarbonization efforts. The problem is, investors remain unclear over what the money will be used for.
Japanese Prime Minister Fumio Kishida proposed in May establishing a “green transformation economic transition bond,” widely referred to in Japan as a “GX bond,” in an effort to raise as much as 20 trillion yen ($143 billion). But the ambiguous name and a lack of details over what the proceeds would be used for are sparking concerns among investors increasingly wary of greenwashing.