French electric utility Electricite de France’s (EDF) recent E1.4 billion Green Bond— the first benchmark issue of this nature from a corporate entity and the largest Green Bond sold to date across all classes of issuers—is making a huge contribution toward furthering the growth of an asset class that is becoming more and more important within the realm of socially responsible investing (SRI) to a range of different investors.
Although 60% of the EDF deal was bought by dedicated socially responsible investment products, the bond roadshow nevertheless also attracted a host of other kinds of investors from a range of different European countries. And a number of these investors chose to participate in the issue because of its innovative and attractive structure, said Blaise Bourdy, managing director and Co-Head of Corporate Origination for France, Belgium, LuxembourgDebt Capital Markets at Societe Generale, joint bookrunner on the deal.
Not only will EDF allocate the bond’s proceeds to best-in-class, new renewable energy projects undertaken by its subsidiary, EDF Energies Nouvelles, the transaction also sets the most advanced Green Bond market standards to date, including the tracking of bond proceeds, an independent second opinion on eligibility criteria and reporting to investors subject to independent verification, Bourdy said.
“Thanks to that, EDF was able to attract not only its traditional investors but also new investors,” Bourdy said. “EDF is the first corporate ever to issue a benchmark Green bond but we expect other corporates to follow suit.”
For firms such as Calvert Investments, that’s great news.
Calvert, a pioneer in socially responsible investing, launched a dedicated Green Bond fund at the end of October as a viable an investment product as any other mutual fund because of the growing importance of environmentally responsible initiatives across the globe, the need to finance them and the increasingly competitive nature of the Green Bond asset class, according to Cathy Roy, chief investment officer at Calvert.