Japan-based securities and investment banking company Nomura Securities announced today that it has started research on determining and evaluating green, social and sustainability bonds (“SDG bonds”), including those not classified as SDG bonds, using natural language processing (NLP) technology, with support from Sony Computer Science Laboratories, Inc. (Sony CSL).
Using NLP technology supplied by Sony CSL, Nomura will analyze issuers’ prospectuses and sustainability reports to evaluate how funds from bond issues are used to achieve sustainable development goals (SDGs). This will enable bonds not classified as green, social or sustainability bonds to be assessed on the extent to which they meet the criteria of their labelled counterparts.
According to Nomura, the research aims to expand the investment target universe while quantifying and refining SDG bond determination.
Finding securities that fit sustainability criteria may have a financial benefit as well, with recent research indicating that sustainable bond issues have developed a “greenium,” driven by investor demand for ESG-friendly investments.
In a statement announcing the new initiative, Nomura said:
“As part of its aim to “Drive Sustainability,” Nomura actively engages in ESG and SDG activities to help resolve social issues and create a more sustainable future.
“By providing data from the research and developing indices, Nomura aims to contribute to the sustainable development of the economy and society, and support the growth of the SDG bond market in Japan.”