The European Investment Bank (EIB) has announced the issuance of new €1.5 billion sustainability awareness bonds (SABs) which are due on 15 May 2041, driven by the challenges the COVID-19 pandemic has imposed before the efforts concerning sustainable development goals’ achievement globally.
The issue took place on the same day as the One Planet Summit for Biodiversity in Paris and extends the scope of the EIB’s sustainability awareness bond to the protection and restoration of biodiversity and ecosystems, according to the EIB.
Funding raised from global capital markets though the EIB’s sustainability awareness bond is dedicated to support long-term investment in projects in alignment with EU Taxonomy Regulation.
Previously, SABs have enabled investors to support COVID-related financing, as well as projects that increase access to water, health, and education, using transparent screening criteria as enabled under the EU’s framework.
Ambroise Fayolle, the EIB’s vice president, said that sustainable finance must be a pillar of the global response to the challenge of climate and environmental degradation, adding that the EIB is providing lending and funding within the framework of ground-breaking EU legislation.
He also added that biodiversity is a core objective at the present and over the coming years.
“EIB’s SABs are allocated only to environmental and social projects with substantial contribution to EU sustainability objectives. In 2018, EIB was the first issuer to align documentation with EU legislation on sustainable finance. Eligibility is now extended to biodiversity. This is a major commitment to transparency to investors in one of the most important areas of engagement for the EU and the EIB”, said Ricardo Mourinho Félix, EIB’s vice-president.
“Climate change, environmental degradation, and zoonosis are directly and closely interconnected. They need to be addressed holistically by capital markets. We therefore welcome EIB’s extension of SAB-eligibilities to biodiversity. The EIB has a coherent approach to sustainability, driven by EU legislation on sustainable finance, and enjoys our strategic support,” according to Lars Dreier Kristensen, senior portfolio manager at ATP, a Danish pension statutory entity.
SAB-issuance grew by more than 5 times in 2020 compared to 2019, assuming a bellwether role in the market, according to the EIB.