JPX Published Framework for Tokenised Green Bonds
JPX (Japan Exchange Group) has published a new green bond framework, which describes JPX's policies on its processes for evaluating and selecting projects, the use and management of the proceeds raised from green bonds, and reporting.
The framework was created in line with ICMA's Green Bond Principles 2021 and Japan's Ministry of the Environment's Green Bond Guidelines 2020, as part of JPX's commitment to generating 100 percent of its group's electricity consumption through renewable energy by 2024.
The funds raised will be loaned to JPX Research Institute and used to finance businesses engaged in renewable energy projects. The target businesses will be identified by JPX's Sustainability Promotion Department. All eligible candidate projects will have to be working to reduce environmental and social risks.
All funds will be allocated to eligible projects within 12 months of the issuance of green bonds, the framework says.
JPX's plans include the installation of a biomass power generation facility that uses waste cooking oil as fuel by end-November, a solar power generation facility by end-July, and a second solar plant by end-September.
The green bonds will be issued as tokenised securities, leveraging blockchain technology to improve the transparency of data and the efficiency of data collection. Under the plan, JPX will automatically measure the amount of power generated by the projects it invests in and the resulting CO2 reduction, and issue daily disclosures so that investors can closely monitor the impact of the investments.
The green bonds will be issued and the disclosures will be made on a security token platform provided by BOOSTRY, which is backed by Nomura Holdings, Nomura Research Institute, and SBI Holdings.
On Friday (16 April), JPX announced a partnership with Hitachi, Nomura Securities and BOOSTRY to issue Japan's first publicly-offered wholesale "Digitally Tracked Green Bond" under the new green bond framework.
A preliminary evaluation of the green bond framework from R&I (Rating and Investment Information) says JPX's processes for evaluating and selecting projects, the use and management of the proceeds raised, and the reporting procedure are "appropriate".
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