- Money financed by the bonds to be spent on the procurement of EVs and hydrogen vehicles, GHGs to be mitigated
- KRW 150-300 billion worth of bonds to be issued in February 2021, equivalent to 20~30% of a total of corporate bonds issued
- “We put the environment and society at the heart of our management to deliver more social values. SK rent-a-car will play a leading role in business model innovation”
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.”