Sustainable Finance
We are proud to be a leader in sustainable finance. We are the first S&P 500 company to have issued three distinct sustainable finance instruments that incentivize combatting climate change.
Through its Sustainable Finance Framework, Johnson Controls may from time-to-time issue Green, Sustainability, and Sustainability-Linked Bonds and Loans.
Any Sustainable Financing should provide clear environmental and social benefits. JCI Sustainable Financings will aim to contribute to environmental objectives including climate change mitigation, climate change adaptation, natural resource conservation, biodiversity conservation, pollution prevention and control as well as social objectives by creating positive outcomes for specific underserved population(s).
Green and Sustainability Financing Instruments
The Johnson Controls Sustainable Finance Framework follows the 2021 editions of the ICMA Green & Social Bond Principles, Sustainability Bond Guidelines and LSTA Green & Social Loan Principles. These principles intend to promote integrity of the Sustainable financing market by offering guidelines that recommend transparency, disclosure and reporting in order to drive investment into Sustainable projects.
In line with the principles, JCI intends to allocate an amount equal to 100% of any Green or Sustainability Financing net proceeds to a portfolio of Eligible Green & Social Projects across the following categories:
- Eco-efficient and/or circular economy adapted products, production technologies and processes
- Green Buildings
- Pollution prevention & control
- Sustainable water and wastewater management
- Clean transportation
- Renewable energy
- Socioeconomic advancement and empowerment, including gender inclusion
After the issuance of any Sustainable Financing, Johnson Controls intends to report on the allocation of net outstanding sustainable proceeds to Eligible Green & Social Projects in the portfolio, and the positive environmental and social impacts related to those Projects.
Sustainability Linked Financing Instruments
The Johnson Controls Sustainable Finance Framework has also been established in accordance with the 2020 ICMA Sustainability-Linked Bond Principles and 2021 LSTA Sustainability-Linked Loan Principles. These principles outline best practices for incorporating forward-looking sustainability outcomes in financing instruments and promote integrity in the development of the Sustainability-Linked finance market.
In line with the principles, JCI intends to issue Sustainability-Linked instruments to tie financing needs to one or more of the following JCI key performance targets:
- Reduce Scope 1 & 2 GHG emissions by 55% by 2030 from a 2017 baseline
- Reduce Scope 3 Use of Sold Products GHG emissions by 16% by 2030 from a 2017 baseline
Net proceeds from Sustainability-Linked instruments will be used for the purposes specified in the applicable offering document. Following any issuance, JCI will report on progress toward these goals annually and in connection with any check in date.
Johnson Controls has retained an independent consultant with recognized environmental and social expertise to provide a Second Party Opinion on the environmental and social benefits of its Sustainable Finance Framework as well as the alignment to Green, Social & Sustainability Bond Principles, Green, Social & Sustainability-Linked Loan Principles and Sustainability-Linked Bond Guidelines, as applicable.
Johnson Controls Sustainable Finance Framework Second Party Opinion (2021) (sustainalytics.com)