In February 2024, the Japanese government announced a bold plan to sell ¥20 trillion worth of bonds directly tied to funding a 10-year, ¥150 trillion GX (green transformation) agenda. The program is meant to accelerate the nation’s decarbonization drive to meet a legally mandated net-zero target by 2050.

After a year, about ¥3 trillion worth of the 5- and 10- year bonds, known as ‘GX bonds’ or ‘GX economic transition bonds’, have been sold over six separate rounds of auctions. That means 15% of the 10-year target has already been reached inside the first 12 months, putting the fundraising ahead of schedule.

But the strong start is showing signs of slowing down. Takeup from outside Japan (which was around 20% of GX bond sales) has been lower than hoped. It’s a sign that overseas investors are either unconvinced by the GX plan or simply oblivious to it. In the world of proliferating green, transition, sustainability and related finance, there’s been a lack of clear messaging around GX bonds or marketing of them internationally.

International fundraising for decarbonization has admittedly become more difficult since the re-election of President Donald Trump. The returning U.S. president has rolled back many of his predecessor’s climate initiatives and waged war on principles like ESG, instead calling on investors and businesses to recalibrate towards pure profits.