Societe Generale : Success of the first positive impact bond issuance contributing to the financing of a low-carbon economy
Societe Generale today successfully issued the first ever Positive Impact Bond, a EUR 500m 5-years fixed-rate senior note, demonstrating its commitment to finding innovative financial solutions to fund the transition to a low-carbon economy in compliance with the best available Environmental and Social standards. The transaction attracted strong demand from investors with a final order book exceeding EUR 3 bn on the back of more than 170 investors.
The proceeds will be used exclusively to fund projects contributing to the fight against climate change. These projects, focused on renewable energy and collective transport, are strictly selected in order to comply with the definition of “Positive Impact Finance” as agreed by leading banks within the United Nations Environmental Program–Financial Initiative (UNEP-FI) in view of the Conference of Parties (COP21) in Paris.
The “Positive Impact Manifesto”, launched on October 13th, is an innovative approach looking at the role of banks and other financial sector players in the economy and the broader environment. It aims to foster the financing of a greener and more inclusive economy thanks to a market-driven approach and defines Positive Impact Finance as what verifiably produces a positive impact on the economy, society or the environment, whilst ensuring any potential negative impacts have been duly identified and mitigated.
Based on this approach, which Societe Generale has pioneered since 2012, Societe Generale has developed a Positive Impact Assessment Framework which has been independently assessed by an external Environmental, Social and Governance auditor, Vigeo, ensuring its alignment with the Green Bond Principles. In parallel, the compliance of eligible assets with the Positive Impact Assessment Framework and their climate benefits have been reviewed by EY in their capacity as independent auditor.
The issuance of this bond also demonstrates Societe Generale’s commitment to drawing on its financial structuring and distribution expertise in order to help build a sustainable bond market, thus deepening capital markets funding sources for sustainable growth projects alongside bank lending.
Commenting on the transaction, Didier Valet, Head of Corporate & Investment Banking, Private Banking, Asset Management and Securities Services of Societe Generale said: “With this first Positive Impact Bond, Societe Generale is leveraging on its recognised structuring and distribution capacity to promote financial solutions facilitating the transition to a low-carbon economy. This initiative demonstrates Societe Generale’s commitment to contributing to the financing of a more sustainable economy in a responsible way. As one of the leading banks in energy financing, Societe Generale is aware of the climate change issues facing our planet and intends to be a key player in the financing of the energy transition.”