SK Rent-a-Car Issues ESG Green Bonds Worth Up to 90 Billion KRW

[Asia Economy Reporter Suyeon Woo] SK Rent-a-Car announced on the 7th that it will issue green bonds to strengthen eco-friendly car rentals and reduce greenhouse gas emissions.

Green bonds are bonds that can only be issued for purposes related to green industries such as electric vehicles and carbon reduction. They are a type of ESG bond (Environmental, Social and Governance) aimed at social responsibility investments including improvements in environment, society, and governance.

SK Rent-a-Car plans to conduct a demand forecast for corporate bond issuance on the 27th of this month. The bond maturities will be two types: 3-year and 5-year, with the green bonds corresponding to the 5-year maturity. The demand forecast will be conducted for a scale of 150 billion KRW, with issuance possible up to 300 billion KRW. Among these, the green bonds are planned to be issued in the range of 30 billion to 90 billion KRW. Specific issuance conditions will be decided later, and green bond certification is expected to be completed through Korea Ratings within this month.

SK Rent-a-Car plans to use the funds raised through green bonds to purchase eco-friendly vehicles. This is to practice ESG-centered management, which has recently become a key topic, by expanding the eco-friendly car rental business. Previously, SK Energy, an affiliate of SK Group, became the first in the manufacturing industry to issue green bonds in 2019, and SK Rent-a-Car’s green bond issuance is the second among related companies.

Demand for eco-friendly car rentals is expected to steadily increase. The government announced the Green New Deal plan last July, investing 20.3 trillion KRW by 2025 to build future mobility such as electric and hydrogen vehicles, and also unveiled the '2050 Carbon Neutral Vision' to reduce greenhouse gas emissions to zero.

Meanwhile, SK Rent-a-Car signed an MOU last year with SK Telecom and Softberry, the nation’s top electric vehicle integrated platform company, to promote a demonstration project for greenhouse gas reduction using electric vehicles. In October, they jointly launched the 'EV All-in-One' product with Softberry, which includes electric vehicle charging fees in the rental fee.

SK Rent-a-Car completed a strategic investment in Softberry in December last year, and going forward, the two companies plan to combine their expertise in charging and electric vehicle operations to provide more convenient and safer charging services.