ZF Friedrichshafen has issued a green bond for the first time.
The company is using the proceeds of EUR500m (US$605m) to finance its wind power and electric mobility business.
"With this green bond, we have created an attractive financial instrument that helps us to finance sustainable future technologies," said ZF CFO, Konstantin Sauer.
"We are addressing new investors and can align our financing with our sustainability goals and our 'Next Generation Mobility' strategy."
ZF's strategy is to be entirely climate-neutral by 2040.
The bond issued by ZF Finance on the Luxembourg stock exchange, targeted at institutional investors, was six-times oversubscribed. It has a six-year term and a yield of 2%. ZF made the issue as part of its EMTN (Euro Medium Term Note) programme set up last year, allowing faster and more flexible issue of bonds.