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Fifth Third Bank Issues Inaugural $500m Green Bond

First US financial institution under $250bn in assets to issue ESG bond

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  • Written by  Banking Exchange staff
Fifth Third Bank Issues Inaugural $500m Green Bond

Fifth Third Bank has settled the issuance of its inaugural green bond for $500 million, with proceeds going to fund green projects that align with the firm’s sustainable bond framework.

The bond will fund eligible projects in green buildings, renewable energy, energy efficiency and clean transportation.

Jamie Leonard, executive vice president and chief financial officer at Fifth Third, said: “With the issuance of our inaugural green bond, we are aligning our financing with our investment and lending priorities and extending our leadership in environmental sustainability.

“Our green bond enables us to provide liquidity to our customers in their transition to a sustainable future as well as additional investment opportunities to our investors to meet their investment objective.”

The green bond also aligns with the Green Bond Principles published by the International Capital Markets Association for use of proceeds, process for project evaluation and selection, management of proceeds and reporting.

Alongside this, Fifth Third published its second-party opinion from Sustainalytics, which found the firm’s framework is ‘credible’, ‘impactful’ and aligned with the green bond, social bond and sustainability bond principles.

In September, Verizon launched a $1 billion green bond offering, the third since its initial offer in 2019. The offering is part of Verizon’s long-term strategy to minimize environmental impact by adding renewable energy to its power grids and avoiding greenhouse gas emissions linked to fossil fuel usage.

Green bonds have propelled in popularity in 2021, with market value reaching $2 trillion, according to Insight Investments. However, greenwashing remains a concern, after research showed only 22% of debt issued in the second quarter met minimum sustainability requirements.

Last month, Fifth Third Bank co-launched a neighbourhood investment program, with housing nonprofit Enterprise Community Partners. The program will support nine majority-Black communities across seven states that have experienced disinvestment.

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