Press Release
JAL, the World's First Airline to Issue Transition Bonds
—Aiming to Pass On This Precious Earth to the Next Generation—
Japan Airlines Co., Ltd. (“JAL”) today decided to issue the world’s first Transition Bonds in the aviation industry.
Transition Bonds, a category of SDG Bonds, are corporate bonds issued by companies who has developed
strategies to achieve long-term goals that aligned with the Paris Agreement and will allocate the proceeds to
initiatives that support the transition towards a carbon-free society. The Bonds are not only its first SDG Bonds,
but also the world’s first Transition Bonds in the aviation industry. The Bonds were also selected by Japan’s
Ministry of Economy, Trade and Industry (METI) as a model example for its 2021 Climate Transition Finance
Model Project*1, marking the first initiative of a Japanese airline being selected. In addition, JAL has acquired
a second party opinion on the alignment of its framework with the existing principles and guidelines from
Sustainalytics, an external review provider operating worldwide.
JAL will make full use of the net proceeds of the Bonds to advance the transition to carbon-free operations in its air transport business and to redouble its efforts to ultimately achieve decarbonization.
*1 A project whereby METI provides information on and reduces the assessment costs for model examples in
order to promote the spread of transition finance. METI selects model examples that conform to the Basic
Guidelines on Climate Transition Finance formulated jointly by METI, the Ministry of the Environment (MOE), and the Financial Services Agency (FSA), and are deemed to have model qualities.
1. Background to the Bonds Issuance
In May 2021, JAL formulated the JAL Group Medium-Term Management Plan for Fiscal years 2021-2025 with the aim of overcoming the current COVID-19 pandemic and adapting to changes in the post-COVID operating environment to achieve sustainable growth and development.
In this management plan, JAL positioned “Safety and Comfort” and “Sustainability” as growth engines amid a time of upheaval accompanied by drastic
changes in values. In order to achieve JAL Vision 2030, its ideal image of the JAL Group in 2030, it set ESG strategy as one of its three strategic pillars
alongside business strategy and finance strategy.
As there is a growing momentum for society as a whole to pursue sustainability and realize true wealth and
happiness, the JAL Group will promote ESG management more than ever in its business activities and work toward achieving the UN Sustainable Development Goals (SDGs) by 2030, targeting the realization of
a sustainable society. In particular, reduction of CO2 emissions from aircraft is one of the most important issues in the aviation industry, given that air travel produces significantly greater CO2 emissions per unit than other
methods of travel, and the public are strident in their demands that emissions be reduced. The JAL Group is
aiming to achieve its target of net-zero CO2 emissions by 2050, primarily by upgrading its aircraft to
fuel-efficient models that emit minimal CO2, and increasing the amount of Sustainable Aviation Fuel (SAF) for
its fleet carries. This is one of the most ambitious targets of all airlines worldwide.
2. Purpose of the Bonds Issuance
By issuing its first SDG Bonds, JAL wants to clearly demonstrate its determination to squarely
confront the issue of reducing emissions from aircraft, which are the biggest source of CO2
emissions in its air transport business.
Increasing aircraft fuel efficiency, securing adequate supplies of SAF, and improving the economic
viability of SAF use will play a key role in reducing CO2 emissions from aircrafts. With regard to SAF, JAL is aiming at achieving net-zero CO2 emissions in collaboration with stakeholders who are
targeted at a carbon-free society. Meanwhile, in terms of the aircraft, the technologies which enable
aircraft to use non-fossil fuel power sources such as electricity and hydrogen are still in the
developing process. Therefore, during the transition period until the new technologies are available,
airlines should regard upgrading their aircraft to the latest fuel efficient models—which is the best
option offered by current technologies— as their top priority among all initiatives towards climate
transition. Accordingly, when planning to issue SDG Bonds, JAL chose to issue Transition Bonds that the net proceeds will be allocated to upgrading to fuel-efficient aircraft.
For the issuance of this bond, JAL drew up its Transition Bond framework*2 in order to promote
initiatives related to its ESG strategy in financing as well. The framework was prepared in alignment with the Climate Transition Finance Handbook 2020 and Green Bond Principles 2021 of the
International Capital Market Association (ICMA); the May 2021 Basic Guidelines on Climate
Transition Finance determined jointly by the FSA, METI, and MOE; and the Green Bond Guidelines
2020 of MOE. In addition, JAL has acquired a second party opinion on the alignment of its framework with these principles and guidelines from Sustainalytics, a company with an excellent reputation
globally as an external review body.
*2 Framework is a document in which an issuer explains the alignment of their securities with the
core components of reference principles such as those of ICMA. Issuers are recommended to
summarize the relevant information within the context of their overarching sustainability strategy.
*3 URL for the second party opinion published by Sustainalytics:
https://mstar-sustops-cdn-mainwebsite-s3.s3.amazonaws.com/docs/default-source/spos/japan-airlines-co.-ltd.-transition-bond-framework-second-party-opinion-(2022).pdf?sfvrsn=aaf4db91_1
3. Overview of the Bonds
*4 Entities that assist with the issuance of Transition Bonds by undertaking tasks such as drawing up the
framework for the bond issuance and obtaining a second party opinion.
4. Use of the Proceeds the Bonds
JAL intends to allocate the net proceeds from this SDG Bonds to the air transport business, which accounts for the majority of CO2 emissions, and aim for financing that contributes to the realization of transitions. JAL plans to allocate the net proceeds of the Bonds to new investments for upgrading to fuel-efficient aircraft (Airbus A350, Boeing-787, etc.), and to refinancing existing investments.
By upgrading to fuel-efficient aircraft, JAL will accelerate efforts to achieve its CO2 reduction targets for fiscal years 2025 and 2030, the interim stages toward its overall target of net-zero emissions by 2050.
■(Reference) Renewal of Flagship Fleet