{"id":2083,"date":"2024-04-17T00:00:42","date_gmt":"2024-04-17T00:00:42","guid":{"rendered":"http:\/\/localhost:8080\/sk-hynix-wins-ifr-asia-award-for-innovative-sustainability-bond\/"},"modified":"2026-06-17T01:34:28","modified_gmt":"2026-06-17T01:34:28","slug":"sk-hynix-wins-ifr-asia-award-for-innovative-sustainability-bond","status":"publish","type":"post","link":"https:\/\/news.skhynix.com\/en\/sk-hynix-wins-ifr-asia-award-for-innovative-sustainability-bond\/","title":{"rendered":"SK hynix Wins IFR Asia Award for Innovative Sustainability Bond"},"content":{"rendered":"

SK hynix received the Best ESG Bond award at the 2023 IFR Asia Awards for its innovative USD 2.5 billion triple-tranche combination trade. Held in Hong Kong by International Financing Review (IFR) Asia on April 16, the awards acknowledged the best practices from the Asian financial sector in 2023. Issued in January 2023, SK hynix\u2019s triple-tranche bond was recognized for striking a balance for investors, offering either a conventional, green, or sustainability-linked note. In particular, the green bond supports the company\u2019s environmental efforts as proceeds fund various sustainability-related projects and innovations.<\/p>\n

\"SK<\/p>\n

\u25b2 Figure 1. SK hynix received the Best ESG Bond award at the 2023 IFR Asia Awards dinner<\/p>\n

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The Inner Workings of SK hynix\u2019s Triple-Tranche Bond<\/h3>\n
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SK hynix\u2019s triple-tranche bond was noted for being creative and offering a variety of investment options while adhering to the needs of both the issuer and investors. The bond was comprised of three segments: a USD 750 million 6.25% 3-year conventional bond, a USD 1 billion 6.375% 5-year sustainability-linked bond (SLB)*<\/span>, and a USD 750 million 10-year 6.5% green bond*<\/span>. The balance of the SLB and green bond in the same transaction drew particular attention for offering something unique to the market.<\/p>\n

The SLB, which was a first for a global semiconductor memory manufacturer<\/a><\/span>, has a core environmental-related KPI. By 2026, it aims for at least a 57% reduction in Scope 1 and Scope 2*<\/span> greenhouse gas (GHG) emissions intensity*<\/span> compared to a 2020 baseline.<\/p>\n

*<\/span>Sustainability-linked bond (SLB): A fixed-income bond tied to predefined ESG objectives that are measured through predefined KPIs. The interest rates of the bond can vary depending on whether the issuer achieves its objectives.
\n*<\/span>Green bond:\u00a0A debt security issued by an organization to finance or refinance projects that are positive for the environment and\/or the climate.
\n*<\/span>Scope 1 and 2:\u00a0Scope 1 refers to direct emissions generated in the production stage, while Scope 2 describes indirect energy-related emissions generated in the process of making electricity or steam used in the workplace.
\n*<\/span>Greenhouse gas (GHG) emissions intensity: The amount of GHG released per production capacity for SK hynix\u2019s semiconductor memory.<\/p>\n

Meanwhile, the net proceeds from the green bond have been allocated towards the financing or refinancing of environmental projects outlined in SK hynix\u2019s Green Financing Framework<\/span><\/a>. These include sustainable water and wastewater management, energy efficiency, pollution prevention and control, and terrestrial and aquatic biodiversity conservation.<\/p>\n

These bonds play a key role in helping SK hynix reach its sustainability goals, such as reaching net zero emissions by 2050. Its environmental commitments are further highlighted by its status as a founding member of the global Semiconductor Climate Consortium<\/span><\/a>, the first consultative body which targets GHG reductions throughout the semiconductor value chain.<\/p>\n

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Green Bond Funds a More Sustainable Semiconductor Ecosystem<\/h3>\n
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\"Allocation<\/p>\n

\u25b2 Figure 2. Allocation by category of the green bond\u2019s USD 750 million proceeds<\/p>\n

In addition to being the most popular portion of the triple tranche deal, the green bond has realized significant advancements in SK hynix\u2019s products as well as its environmental efforts. A total of 92.8%, or USD 696 million, of the bond\u2019s total proceeds (USD 750 million) was allocated by the third quarter of 2023, with all of the funds expected to be allocated by the end of 2023 (awaiting confirmation of fourth quarter data).<\/p>\n

[Read the 2024 green bond annual report for more information on its impact here<\/span><\/a>]<\/p>\n

\"The<\/p>\n

\u25b2 Figure 3. The green bond\u2019s positive effect on water management from 2020 to 2023<\/p>\n

Among the funds, USD 6.90 million was allocated to sustainable water and wastewater management. Efforts included work on a regional municipal water project, construction of a drainage reuse system for a cooling tower, and improvements on a water pollution treatment facility. As a result, the company expects to see an increase in its water reuse rate and a reduction in wastewater discharge.<\/p>\n

\"DDR5<\/p>\n

\u25b2 Figure 4. DDR5 offers reduced power consumption compared to its predecessor<\/p>\n

SK hynix allocated its largest portion of the green bond\u2019s proceeds for improving energy efficiency as the company invested USD 681.16 million in realizing significant related advancements in the company\u2019s products. These developments included its industry-leading server DRAM DDR5<\/span><\/a> achieving a 70% increase in server bandwidth compared to DDR4, while its power consumption decreased by 14.4% compared to the previous generation. The performance per watt of the company\u2019s latest SSD product, PS1010 E3.S, also improved by 85% from the earlier generation PE8110 E1.S.<\/p>\n

\"An<\/p>\n

\u25b2 Figure 5. An ecological park near SK hynix\u2019s Icheon main campus which uses recycled water<\/p>\n

A further USD 750,000 was allocated to terrestrial and aquatic biodiversity conservation. These funds supported construction of a large public ecological park near SK hynix\u2019s Icheon campus which stretches the area of nearly four American football fields. At the park, crystal-clear water comes from the campus\u2019 wastewater treatment plant and flows into the Jukdang Stream in Icheon.<\/p>\n

\"Reduction<\/p>\n

\u25b2 Figure 6. Reduction of NOx emissions in tons at the Icheon and Cheongju fabs<\/p>\n

Another USD 6.96 million was allocated to pollution prevention and control. The proceeds funded monitoring systems for atmospheric management, infrastructure for nitrogen oxide reduction, and a temperature reduction system in both the company\u2019s Icheon and Cheongju fabs. Consequently, from 2020 to 2023, emissions of nitrogen oxides (NOx) were reduced by around 530 tons in these two major fabs. In addition, air pollutant analysis systems and water quality measurement systems have been installed in the fabs to monitor for environmental problems, minimize environmental harm, and make restoration efforts.<\/p>\n

\"Financial<\/p>\n

\u25b2 Figure 7. Financial Management Head Hyungmo Yang highlights how the bond supports SK hynix\u2019s environmental goals<\/p>\n

\u201cOur triple-tranche bond offers varied investment opportunities while also supporting our sustainability efforts,\u201d said Hyungmo Yang, head of Financial Management. \u201cIn particular, the green bond funds environmental innovations such as increased product energy efficiency, improved wastewater management, and pollution reduction. Going forward, the bond\u2019s proceeds will continue to help us meet our environmental goals.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

SK hynix received the Best ESG Bond award at the 2023 IFR Asia Awards for its innovative USD 2.5 billion triple-tranche combination trade. Held in Hong Kong by International Financing Review (IFR) Asia on April 16, the awards acknowledged the<\/p>\n","protected":false},"author":23,"featured_media":2075,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_migrated_source_id":14786,"footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[6],"tags":[163,307,605,604,308,48,277,49],"class_list":["post-2083","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-story","tag-esg","tag-green-bond","tag-ifr","tag-prism","tag-slb","tag-social-value","tag-sustainability","tag-sv","series-skhynix-esg"],"acf":[],"_links":{"self":[{"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/posts\/2083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/comments?post=2083"}],"version-history":[{"count":3,"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/posts\/2083\/revisions"}],"predecessor-version":[{"id":6707,"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/posts\/2083\/revisions\/6707"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/media\/2075"}],"wp:attachment":[{"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/media?parent=2083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/categories?post=2083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.skhynix.com\/en\/wp-json\/wp\/v2\/tags?post=2083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}