Health technology company Philips announced the pricing of its new €650 million green bond offering, he first by the company – and in the healthcare industry – to be issued under the EU’s European Green Bond (EuGB) standard.
Adopted by the EU in November 2023, the EuGB regulation was launched by the European Commission to establish a “gold standard” for green bonds, in order to combat greenwashing and advance the sustainable finance market in the EU.
Under the regulation, all proceeds from instruments issued using an EuGB designation are required to be invested in economic activities that are aligned with the EU Taxonomy. Companies issuing bonds under the EuGB designation are also required to follow strict transparency criteria, including disclosing how the proceeds from the bonds will be used, as well as committing to a green transition plan, and reporting on how the investments contribute to the those plans.
According to Philips’ European Green Bond Factsheet, published by the company earlier this month, proceeds from EuGB-aligned issuances will be used for financing of investments towards projects that support the transition to a circular economy. The factsheet also notes Philips’ goal to achieve net zero GHG emissions across the value chain by 2045, with financed activities through EuGBs supporting the realization of its transition plan through backing of the design of energy-efficient products and collaborating with customers to reduce emissions during the use-phase, and adopting circular economy practices and transitioning to sustainable alternatives to reduce purchased goods emissions.
The pricing for the 2034 bonds resulted in a yield of 4.055%. The company said that the offering was oversubscribed by 2.7 times.
