SK rent-a-car is issuing green
bonds in an effort to mitigate greenhouse gas (GHG) emissions as well as to
reinforce eco-friendly car rental service.
The only green industry-related
investment, such as electric vehicles (EVs) or carbon reduction, qualifies for
the issuance of green bonds. The bonds belong to ESG (Environmental, Social and
Governance) bonds which aim for social responsibility investment regarding the
enhancement of the structure in terms of the environment, society and
governance.
SK rent-a-car has a plan to
conduct a demand forecasting concerning the issuance of the corporate bond on
the 27th of this month. There are two types of maturities, 3-year
and 5-year bonds. And the green bonds belong to the latter. The forecast is to
be carried out on a scale of KRW 150 billion, and the maximum possible amount
of issuance is KRW 300 billion. The detailed terms and conditions are to be
determined. The issuance is expected to be certified by Korea Investors Service
Inc. in the third week of the month.
The company plans to spend the money
funded by the bonds on the purchase of electric vehicles. It is part of the
efforts to put into action the ESG-centered management, recently emerged as a
hot issue, by expanding the scope of the eco-friendly vehicle rental business. SK
Group is spearheading the ESG management company-wide. SK affiliates are in
line with the trend, establishing ESG-dedicated departments or expanding them.
SK energy issued green bonds for the first time in 2019 in the manufacturing
industry, and SK rent-a-car is to become the second affiliate in terms of the
green bond issue.
Eco-friendly car rental is
forecasted to constantly grow in demand. In July last year, the government unveiled
its Green New Deal plan to pour KRW 20.3 trillion into future mobility
establishment such as EVs or hydrogen-fueled cars by 2025 while announcing ‘2050
Carbon Neutral Vision’ for zero-GHG emission. According to data from the
Ministry of Environment, the accumulated number of eco-friendly vehicles was
145,000 (134,000 EVs and 11,000 hydrogen-fueled cars) last year. The number is
expected to soar to 256,000 this year and to 1,330,000 by 2025.
SK rent-a-car signed an MOU last
year with SK telecom and Soft Berry, the No. 1 comprehensive platform for EV,
to work on a demonstration project of GHG mitigation. In addition, the company
launched ‘EV All in One’ deal last October in collaboration with Soft Berry. It
relieved users of burden about charging because the rental rates already cover EV
charging fees.
Furthermore, SK rent-a-car
completed its investment in Soft Berry for the strategic coalition in December
last year, based on which both will bring together their own know-how in
regards of EV charging and operation to ensure a more convenient and safer
charging service.
An SK rent-a-car official said, “the green bond issue is just a start. We will continue to deliver more social values by putting the environment and society at our heart of management and play a leading role in business model innovation.”