CSR Topics | Development of Products Linked to Emissions Credits Futures Prices

Nomura Singapore Limited, Nomura Group's subsidiary in Singapore, has teamed up with Hitachi International Treasury, the financial subsidiary of Hitachi, to develop bonds tied to CO2 emissions futures traded in Europe. Because fluctuation in the emissions futures price is reflected in the bond redemption price, the redemption price is higher if the emissions futures price is higher when the bond is redeemed than when it was issued, and vice-versa. These bonds were issued on a trial basis on February 2006, with the goals of exploring possibilities for low interest financing and developing a track record in the emissions futures market.

Hitachi Group invests aggressively in energy conservation, and is acting to stop global warming by reducing CO2 emissions. It is nevertheless impossible to avoid emitting CO2 in the manufacturing processes used in the rapidly expanding digital home electronics and computer equipment market. Stricter anti-global warming regulations are therefore anticipated over the long term, increasing the need for the hedging of environment costs through means such as emissions credits. Nomura Group is committed to delivering financial solutions for business risks such as environment related issues.