When issuing a Green Bond, it is recommended that the issuer provides a "use of proceeds", "prior provision of information regarding project evaluation and selection process to investors", "management of proceeds", and "disclose" such information. It is also recommended that an external review of these measures is used if an objective evaluation is required.

❶ Use of Proceed

The Green Bonds proceeds should be allocated to Green Projects that have clear environmental benefits. "Green Project with a clear environmental benefit" is a project where the issuer assesses that the negative environmental benefits (e.g. large-scale land development when installing solar power, damaging the landscape or ecosystem) are not excessive compared to the original environmental benefits.

Projects for renewable energy

(including generation, transmission, appliances, and products)

  • Renewable energy projects involving solar power, wind power, hydropower, biomass (only those whose sustainability has been confirmed or those which derive from waste material), geothermal power and so on.
  • Projects to install, manage, and maintain power lines that transmit electricity generated by renewable energy, and batteries that store the electricity, adjust to demand and supply, and store energy
  • Projects to manufacture appliances and products used in the aforementioned projects, such as solar panels, power lines, and batteries
  • Projects that engage in renewable energy-derived heat utilization, such as solar heat and geothermal heat
  • Use of renewable energy for all or part of the power used in offices, plants, houses and so on
  • Projects to offer ICT solutions (including maintenance and management systems, operation systems, optimum supply-demand balancing etc.) for projects contributing to renewable energy, and so on.

Projects for energy Efficiency

(such as in new and refurbished energy efficient buildings, energy storage, district heating, smart grids, appliances and products)

  • Projects for the construction of highly energy efficient buildings, including the net zero energy house (ZEH) and net zero energy building (ZEB)
  • Projects to renovate offices, plants, and houses for better energy efficiency (including renovation to install insulation) to gain high-energy performance certifications such as the LEED, CASBEE, or BELS certifications
  • Projects to introduce highly energy efficient equipment and facilities into offices, plants, and houses
  • Projects for the development and introduction of smart grids Projects to offer ICT solutions for energy saving (Building Energy Management System (BEMS), Home Energy Management System (HEMS), Continuous Emission Monitoring Systems (CEMS), ITS, supply chain management, etc.), and so on

Projects for pollution prevention and control

(including waste water treatment, GHG control, soil remediation, 3R-based [reduce, reuse, recycle] waste management and waste-to-energy, and associated environmental monitoring analysis)

  • Projects that contribute to achieving a circular economy (designing and manufacturing of resource-saving and long-life products; use of materials with environmental load reduction benefits such as recycled materials and recyclable resources; inverse manufacturing (i.e. designing and manufacturing of products based on the preplanned flow of collection, disassembly, selection and reuse); advanced collection and disposal of waste (including recycling and heat recovery))
  • Projects to control the release of toxic chemicals into the environment by, for instance, introducing advanced facilities and technologies or using alternative products for the prevention of leaks, volatilization and infiltration of toxic chemicals
  • Projects to prevent the release of fluorocarbons into the atmosphere, to collect and to destroy fluorocarbons (including designing and manufacturing of products contributing to the control of fluorocarbons)
  • Projects to build facilities that contribute to the advanced treatment and recycling of wastewater from plants, etc.
  • Projects for the treatment of polluted soil
  • Projects to contribute to the prevention of environmental pollution by marine plastic waste
  • Projects to provide ICT solutions to help manage and prevent the release of water pollutants, air pollutants and toxic chemicals and manage waste disposal, and so on

Projects for the sustainable management of living natural resources and land use

(including environmentally sustainable agriculture, fishery, aquaculture, and forestry, integrated pest management (IPM), weed management, and drip-irrigation)

  • Projects to acquire sustainable fishery and aquaculture certifications such as the MSC (Marine Stewardship Council) and ASC (Aquaculture Stewardship Council) certifications
  • Projects related to conservation and restoration of aquatic resources
  • Projects to acquire sustainable forestry certifications such as the FSC® (Forest Stewardship Council) certification
  • Projects related to sustainable afforestation programmes
  • Projects related to conservation and restoration of natural landscapes
  • Projects to provide ICT solutions to contribute to the sustainable management of living natural resources and land use (including traceability systems concerning sustainability of agriculture, forestry and fishery resources), and so on
  • Projects to conserve and/or to create urban greenery and green networks in collaboration with local municipalities, and so on.

Projects for terrestrial and aquatic biodiversity conservation

(including the protection of coastal, marine, and watershed environments)

  • Projects for the conservation of wetlands and coral reefs
  • Projects to prevent eliminate bird or animal damage or non-native species for prevention of damage to ecosystem inflicted by birds and animals such as deer or non-native species
  • Projects for the transformation of river walls into more natural forms
  • Projects to provide ICT solutions to contribute to the preservation of biodiversity (ecosystem monitoring by use of satellites, flight vehicles, IoT, etc., forest management systems, bird and animal damage prevention systems, biodiversity data analysis), and so on

Projects for clean transportation

(such as energy efficient next-generation vehicles, public transportation, railways, bicycles, non-motorized, multi-modal transportation, infrastructure for clean energy vehicles and the reduction of harmful emissions)

  • Projects for the development or manufacture of energy efficient next-generation vehicles, such as electric vehicles, fuel-cell vehicles, hybrid vehicles, and plug-in hybrid vehicles and the development and maintenance of infrastructure for the use of such vehicles
  • Projects to enhance the efficiency of logistics systems by the systematic installation of logistics bases, aggregation of transportation networks, modal shifts, and coordinated transportation and delivery
  • Projects to introduce devices (such as digital tachographs) to support eco-driving
  • Projects to develop facilities for park-and-ride and car-sharing systems, and so on

Projects for sustainable water management

(including sustainable infrastructure for clean and/or drinking water, sustainable urban drainage systems, and river training and other forms of flood mitigation)

  • Projects to conserve the water circulation cycle, such as water source protection and penetration of rainwater into soils (including the development of green infrastructure)
  • Projects to develop and improve flood prevention facilities
  • Projects for seawater desalination, and so on

Projects for climate change adaptation

(including information support systems, such as climate observation and early warning systems)

  • Projects to reinforce disaster prevention functions of logistics, railways, ports, airports, roads, water supply infrastructure, waste disposal facilities, traffic safety facilities and private real estate
  • Projects to ensure the sustainability of businesses such as measures against climate disasters or relocation from areas with higher climate risks, measures against heat, efforts to ensure a stable supply of raw materials
  • Projects to improve green infrastructure such as adaptation based upon ecosystem or ecosystem-based disaster risk prevention reduction (ECO-DRR)
  • Projects related to development and introduction of crop species that are resilient to climate change or introduction of agriculture with small environmental loading
  • Projects concerning climate observation and monitoring or early warning system or projects to provide IT solutions that contribute to adaptation to climate change
  • Projects related to efficient utilization of water resources or introduction of drought management, and so on

Projects concerning eco-efficient products, production technologies, and processes

(including the development and introduction of environmentally friendlier, eco-labeled, or certified products, and packaging using recyclable or renewable resources or other materials which reduce environmental loading)

  • Projects to manufacture products that may obtain environmental certification or environmentally compatible products (including construction and renovation of plant and offices to be used for the manufacture of those products)
  • Projects for the research, development, and introduction of technology and products that contribute to reducing the amount of greenhouse gas, and so on

Projects concerning Green Buildings

  • Projects to newly build or renovate Green Buildings that not only are energy efficient but also address a wide range of issues for consideration such as water consumption or waste management in compliance with domestic standards or with an environmental certification that demonstrates a high level of efficiency in the environmental certification system such as CASBEE certification and LEED certification

The Green Bond Guidelines state that the use of the proceeds should be explained to investors in advance by means of legal documents such as the prospectus and other documents. For example, the most common means of making these documents available is on the issuer's website.

It is possible to allocate the funds to refinance Green Projects that have already started.

Possible refinancing examples

  • Cases where the Green Bond proceeds are allocated to repay (refinance) loans related to Green Projects.
  • Cases where new Green Bond proceeds are used to redeem a bond that has been issued to finance existing or completed Green Projects at maturity.
  • Cases where financial institutions allocate Green Bond proceeds as a resource for existing loans linked to Green Projects.