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Johnson Controls issues USD 500 mn sustainability-linked bond

Company says it is the first S&P500 industrial company to publish an integrated sustainable finance framework and issue such a bond, which aims to target greenhouse gas emissions reduction goals


CORK, Ireland, 16 September 2021: Johnson Controls (JCI) said it has issued its first Sustainability-Linked Bond offering of USD 500 million in 10-year senior notes. The offering of the bond, the company said through a Press release, is in conformity with the company’s recently published integrated green, social and sustainability-linked finance framework. The publication of the framework and issuance of a bond mark two new sustainability milestones for Johnson Controls, which has become the first S&P500 industrial company to complete both accomplishments, it said.

Earlier, in January 2021, Johnson Controls adopted a new set of ambitious environmental goals, which it said, were approved by the Science Based Targets Initiative. The company said it has committed to cut operational emissions by 55% and reduce customers’ emissions by 16% before 2030. Based on the commitments, the company said, it issued the bond, which ties the interest rate on the bond to the achievement of the environmental goals. This means that Johnson Controls will pay a higher interest rate to bond investors if it fails to meet its interim targets for reducing Scope 1 + 2 and Scope 3 carbon emissions by September 16, 2025.

“Experts say that an additional USD 1-2 trillion/year must be invested in sustainability and cutting greenhouse gases if we are going to have any chance of meeting the steep carbon reductions science tells us is urgently required,” said George Oliver, Chairman and CEO, Johnson Controls. “Governments alone will not be able to mobilize this sum of money, so private sector capital needs to get sustainable, and fast. Building the market for sustainable finance is, therefore, an imperative; and ensuring that the highest standards are met so that dollars flow to projects that truly accelerate decarbonization, is also critical. With our continued commitment to sustainable finance and aggressive sustainability targets, we are showing our leadership in the field.”

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