Toyota Financial Services (TFS) has issued a fifth $750 million green bond to help finance environmentally friendlier vehicles such as the Toyota Prius and Lexus hybrid vehicles that qualify under specific clean air criteria, including powertrain, fuel efficiency and emissions. CFO Scott Cooke says, “Our green bonds are an important tool that TFS uses to fund the sale of environmentally friendly vehicles while providing an attractive option for sustainability investors.”

Green bonds are a way for an issuer to raise money specifically for environmentally friendly projects, such as clean transportation or renewable energy, according to Bloomberg. Green bonds came on the scene roughly a decade ago and have boomed in recent years as companies develop socially conscious debt products.

Toyota introduced the Prius in 1997, and hybrids have since reduced CO2 emissions by 108 million tons versus comparable gasoline-powered vehicles. 2019 saw a record number of green bonds issued worldwide with financial institutions and governments issuing $185 billion total to fund environmental projects.

Qualifying vehicles include the Toyota Avalon Hybrid, Toyota Camry Hybrid, Toyota Corolla Hybrid, Toyota Mirai, Toyota Prius, Toyota Prius Prime and the Lexus ES 300h. They must possess a gasoline-electric hybrid or alternative fuel powertrain; achieve a minimum of 40 highway and city miles per gallon (MPG or MPG equivalent); and receive a smog rating of seven or better (where 10 is the cleanest), as determined by the U.S. Environmental Protection Agency for the purchase of a vehicle in California. Toyota says it has increased the vehicle eligibility requirements from 35 miles per gallon to 40 miles per gallon.