Investors can participate in Mercedes-Benz Group's sustainability goals. At the same time, Mercedes-Benz Group uses sustainable financial instruments such as green bonds and green loans to finance significant future investments.
With the Green Finance Framework, we are preparing for the use of sustainable financing instruments. This gives us access to further liquidity for our future investments and at the same time opens up new opportunities for green investors.
Our Green Finance Investor Report
With our first Green Finance Investor Report in line with our Green Finance Framework commitments and transparency journey, we want to give you an insight into how we are using the funds from these first two green bonds, that we issued in September 2020 and March 2021.
In addition to an in-depth presentation of our Green Investment Strategy, this report includes a detailed description of the financed projects (allocation report), as well as additional key figures and information on their respective effects on CO2emissions (impact report).
Our Green Finance Framework in detail
The Green Finance Framework summarizes the principles according to which the Mercedes-Benz Group will use green financing instruments in the future. The framework was evaluated by an experienced external expert. These framework conditions apply to a wide range of debt instruments such as green bonds, green notes, green commercial bills and green loans. The proceeds will only be used to finance projects that directly pave the way to a low-carbon and climate-resilient society.
The structure of the Daimler Green Finance Framework is consistent with both the ICMA Green Bond Principles (GBP) 2018 and the LMA and APLMA Green Loan Principles (GLP) 2018. The Mercedes-Benz Group will apply best practices in relation to green bonds and green loans in line with evolving market standards and the entry into force of the EU classification of environmentally sound economic activities (taxonomy) and the EU Green Bond Standard. The Swedish bank SEB acted as a consultant for the structuring of the green financing.
With CICERO Shades of Green, the Mercedes-Benz Group has commissioned a leading independent expert for the research-based assessment of Green Finance Frameworks with the review of its regulations. The Daimler Framework received the highest rating from CICERO with "Dark Green".
The Mercedes-Benz Group will allocate the net proceeds from the green financing instruments to various projects. This ranges from research and development activities for emission-free vehicles, their production and the production of the respective drives to the development and construction of a charging infrastructure. The proceeds from the green financing can also be used to modernize and upgrade production facilities and build new factories for emission-free vehicles and their drives, as well as to build up the recycling of batteries and cells. Another category for eligible projects is investment in reducing energy and other resources, building renewable energy, preventing and reducing waste, and reusing and recycling materials.
The Mercedes-Benz Group will submit an annual Green Finance Investor Report in order to provide investors and the public with transparent information about financial indicators and the climate effects of the financed projects. Examples of impact indicators and key figures that can be included in the report in the “Clean Transportation” category are the number of emission-free vehicles sold (BEV, FCEV) and the reduced CO₂ emissions in the usage phase. The annual reduction in CO₂ emissions is an option in the “Energy Efficiency” category.
The first benchmark Eurobond issued by the Mercedes-Benz Group AG in September 2020 with a volume of €1 billion, a term of 10 years and an annual coupon of 0.75% was more than 4-times oversubscribed and driven by a high-quality orderbook. The issuance was arranged by BBVA, BNP Paribas, Commerzbank, Crédit Agricole, SEB and Unicredit.
In March 2021, Mercedes-Benz Group AG issued a second green bond. The paper has a volume of €1 billion, a term of twelve years and an annual coupon of 0.75%.
Use of the proceeds
Mercedes-Benz Group will use the net proceeds from the green financing instruments, for example, for the development and production of emission-free vehicles with battery electric drive (BEV) and fuel cell electric drive (FCEV). The use of the proceeds and the climate effects of the projects are published annually in a Green Finance Investor Report.
Daimler wins Environmental Finance Bond Award
With this award, the online platform Environmental-Finance.com recognized the Mercedes-Benz Group's promotion of green finance as an important element of our sustainable business strategy.