Automotive giant General Motors (GM) announced the launch of its first green bond offering, pricing $2.25 billion of senior unsecured notes to finance its clean transportation strategy.
GM has committed to significantly ramp investments in electrified mobility, announcing plans last year to invest $35 billion in its EV and AV strategy between 2020 and 2025. At its investor day last year, the company outlined the anticipated opportunity from its electric vehicle initiative, with EV sales expected to hit one million units by 2025 and EV revenue forecast to grow to $90 billion in 2030.
Earlier this year, GM announced plans to invest over $7 billion in electric vehicle and battery production in North America, and last week the company revealed that it has secured sufficient battery raw material to support its goal of 1 million units of EV capacity in North America by 2025.
The green bond offering follows the publication last week of GM’s new Sustainable Finance Framework, outlining eligible categories for investment for the company’s green and social financings, along with the process for project evaluation and selection, management of proceeds, and reporting obligations.
According to a prospectus filed by GM, proceeds from the offering will be used to finance or refinance green projects, under the ‘Clean Transportation’ category outlined in the framework, including R&D, facilities and infrastructure investments, and operational expenditures for solutions ranging from zero-emission vehicles and charging solutions to fuel and battery cell technology and vehicle-to-grid investments.
On an analyst conference call last week discussing the company’s Q2 2022 results, GM CFO Paul Jacobson said that the new framework “will unlock options to help us align our balance sheet with our ESG strategy.”
GM’s sustainable finance framework received a second-party opinion from Moody’s ESG Solutions, indicating an “Advanced” impact on sustainability, and mapping the framework to 9 of 17 UN Sustainable Development Goals (SDGs), and the bonds were assigned a BBB- rating by Fitch Ratings.