Impact report of the year (for issuers) & Initiative of the year - Sustainability bond: EIB
The European Investment Bank (EIB) claimed two awards this year, for Impact report of the year (for issuers) and Initiative of the year in the category of sustainability bonds.
The EIB's Sustainability Awareness Bonds (SAB) framework – a counterpart to its Climate Awareness Bonds (CAB) framework – is aligned with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines.
- Description of SAB processes in line with the logic of the EU Taxonomy Regulation;
- Disclosure of SAB technical screening criteria for substantial contribution "in alignment with the logic of" the EU's taxonomy for sustainable activities;
- Rearrangement of the framework's content to suit the EU Green Bond Standard (GBS) template proposed by the TEG;
- Improvement of allocation and impact reports in line with the EU Technical Expert Group's GBS proposal – inter alia providing for each bond a summary of allocations by sector, geography and sustainability objective.
One of the Bond Awards judges said: "The encompassing of both the latest publications, standards and principles establishes best practice. But with the commitment to future publications embedded within the framework this entry is pushed to the forefront of thinking and from the institution which established the first issue back in May 2007 that began the green bond market revolution."
Another commented on the SAB's focus on the EU taxonomy and European Green Bond Standard (GBS): "The mission was clear and the objective clearly executed, with a resulting valuable sustainability framework".
One judge said: "The examples and [award] submission [are] exhaustive and show "excellence" in the new SAB framework, even with the challenges facing the EU Taxonomy."
Another commented: "The complex challenges that the EIB faced to align its SAB, for me is worth first place."
The EIB also won Impact report of the year (for issuers), for its early alignment of CAB/SAB impact reports, with the proposed EU GBS.
Judges said the report was "comprehensive", "very well documented" and the "best".
The document explains how the bank is aligning its green and sustainability bonds with the EU Taxonomy Regulation and the proposed EU GBS.
According to the Climate Bank Roadmap 2021-2025, approved by the EIB's board in November 2020, the EIB will:
- Increase its green finance to exceed 50% of its new lending activity by 2025;
- Align its tracking methodology for green finance with the EU Taxonomy Regulation;
- Reflect such alignment by extending the eligibilities of CABs and SABs;
- Gradually align CABs & SABs with the proposed GBS.
Commenting on the wins, Aldo Romani, the EIB's head of sustainability funding, said the SAB and CAB frameworks were “charting waters that hadn’t been explored before.”
Romani said: “These reports aim to clarify the status of EIB’s progressive alignment with evolving EU legislation on sustainable finance. They are the result of a choral exercise in which the funding officers carry the responsibility of making facts intelligible to investors via a market-driven dialogue with the project evaluation experts and the auditors.
"I insisted on a factual and sober description with no fancy pictures, to underline that we are trying to ascertain substance.”
Romani won Personality of the year in the 2018 Green Bond Awards.
Tomomitsu Maruta, a sustainability funding associate officer at the EIB, said: “The frameworks, including impact reports, have value on two core points.
"Firstly, there is still uncertainty around the EU taxonomy, and the market is looking for guidance… we decided to take a forward-looking approach with focus on the logic of the taxonomy that provides a constructive reference for investors and auditors.
"Next, the documents provide unprecedented transparency on eligibility criteria, which can be benchmarked against external criteria for the first time”.