With a new awards program, Global Finance highlights banks and companies taking the lead in innovating and expanding the reach of sustainable finance.
Heat waves, flooding, fires and pestilence. A concerted geopolitical effort—and massive funding—will be required to mitigate the worst effects of rapid climate change. Hence sustainable finance is quickly becoming a megatrend.
Consider: In the first half of 2021, green, social and sustainability bonds accounted for 10.4% of the total global bond market, nearly twice the proportion for 2020’s first half, according to Refinitiv. Green bonds alone soared to $259 billion, nearly three times their global volume for the same period in 2020. Social bonds also reached new heights in the first half of 2021, as did sustainability bonds, which combine elements of green and social bonds. At the tail end of August, San Francisco-based sustainability-focused (but as yet profitless) shoemaker Allbirds announced it would go public with a “Sustainable Public Offering.”
The focus and impact of sustainable finance isn’t limited to global warming—or even to the environment. The ongoing coronavirus pandemic focused attention on social inequalities and related economic costs, prompting a resurgence in social impact bonds, which fund initiatives in health care, affordable housing, minority entrepreneurship, education and the like.
But traditional environmental, social and governance (ESG) instruments—sustainable bonds, green bonds, green loans etc.—aren’t the whole story, either, because innovators have been at work in the sustainable finance sector. More-recent debt products like sustainability-linked bonds are now positioned to make sustainable finance more mainstream. Proceeds aren’t “ring-fenced” for green uses only, so issuers have greater flexibility in their use. At the same time, the accountability mechanisms are more precise: Issuers promise to meet certain green or social performance goals or pay a penalty.
“The development of sustainability-linked instruments—which emerged only a couple of years ago—is set to further increase,” says Hacina Py, head of Impact Finance Solutions at France’s Societe Generale.
Against this backdrop, Global Finance announces the honorees for its inaugural Sustainable Finance Awards and describes a small fraction of the excellent and innovative work these companies are doing to support sustainable development around the world.
All selections were made by a team of Global Finance editors and contributors, based on information submitted in entries (required for consideration) as well as independent research and analysis. There was no fee to participate. Judging of regional awards took into account the unique factors and state of development in the different regional economies. In categories that had no worthy honoree, no award was given. The text was written by lead researchers Andrew Singer and Laura Spinale, as noted throughout.
SUSTAINABLE FINANCE | GLOBAL WINNERS |
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Overall Outstanding Leadership in Sustainable Finance – Bank
Outstanding Sustainable Financing in Emerging Markets
Outstanding Leadership in Sustainable Loans
Societe Generale
Societe Generale (SocGen) has been a leader in sustainable finance globally, including in Europe, Africa and Asia. It served as a joint bookrunner last year for Asia’s first blue bond, the fourth in history and by far the largest, issued by the Bank of China for $942.5 million. SocGen was joint bookrunner for the first-ever sustainability-linked convertible bond: Schneider Electric’s €650 million (about $767 million) issue in 2020.
Indeed, SocGen has been a pioneer in its embrace and innovative use of sustainability-linked bonds (SLBs) and sustainability-linked loans—a relatively new and arguably more accountable ESG finance structure, where investors earn more interest if borrowers fail to meet sustainable targets. The bank was active in some of last year’s largest deals—such as the Enel Group’s record-breaking $4 billion SLB, placed in July. SocGen served as structuring adviser and active bookrunner, too, when Netherlands-based Ahold Delhaize came to market in March of this year with a €600 million SLB issue that pays 0.375%. The giant food retailer has two sustainability-performance targets. By 2025, it must 1) reduce its Scope 1 and 2 CO2 emissions by 29%; and 2) reduce food waste, measured in tons of food waste per food sales, by 32%. If it fails? The food retailer will face a coupon step-up of 25 basis points.
Hacina Py, head of Impact Finance Solutions at Societe Generale, foresees strong growth in this sector: “All regions should see increased ESG activity, to either finance the energy transition; build social infrastructures where huge needs arose during the Covid-19 crisis; fight against the dramatic loss of biodiversity; or finance SDGs [the United Nations’ Sustainable Development Goals] in general, especially in emerging countries.”
Overall Outstanding Leadership in Sustainable Finance – Corporate
HP
HP moved nearer in 2021 to fulfilling its goal of becoming “the most sustainable and just company in the industry,” with inaugural issuance of sustainability notes, in June, totaling $1 billion, part of a $2 billion debt offering. This followed a $5 billion, five-year revolving credit facility structured as a sustainability-linked loan (SLL), which closed in May 2021. The SLL has both green and social targets: 1) achieving net-zero greenhouse gas emissions across the HP value chain by 2040, and 2) doubling the number of African American executives at the company by 2025. The pricing of the SLL will increase or decrease based on whether HP reaches those targets.
On the social side, HP was the first Fortune 100 tech firm to commit to 50/50 gender parity in leadership—a goal the company expects to reach by 2030. It was also the only technology company globally to receive a triple A rating from CDP (formerly the Carbon Disclosure Project) across its Climate Change, Forests and Water Security lists.
Overall Outstanding Leadership in Sustainable Finance – Multilateral Institution
IFC
International Finance Corporation, part of the World Bank Group, takes top honors for global work by a multilateral. Not only is IFC rated AAA by MSCI, but in November 2020 it provided the “first-ever blue loan to a global plastic resin manufacturer,” aimed at recycling 50 billion PET (polyethylene terephthalate) bottles a year by 2025. In fiscal 2020, the organization supported 24 green bond issues in nine currencies totaling $1.2 billion. Projects include wind, solar and biomass energy, as well as more environmental transport, banking and agribusiness.
IFC has been a leader in green bonds since its inaugural issue a decade ago. Its Green Bond Program focuses on energy—reducing consumption through green buildings and more-efficient use while also boosting supplies from renewable sources. “Green bonds are currently the most issued sustainable bond product, with $290 billion issued in 2020,” says Denise Odaro, head of investor relations at IFC. Furthermore, she adds that in the next decade, “most if not all bonds issued will have an explicit sustainability component, resulting in a truly mainstream approach.”
IFC is a leader in social bonds also, raising $1.6 billion through 11 social bonds in four currencies in 2020. These various projects will provide microloans, residential housing loans, power to 1.9 million connections, feed three million people, and more, according to IFC’s FY2020 Social Bond Impact Report.
“Since the coronavirus outbreak, the IFC Investor Relations team has received an increasing number of requests from potential issuers and other market participants for advice on how to set up Social Bond Programs and corresponding frameworks,” notes Sophie Peters, IFC analyst. “We are hopeful that the growing use and interest in these bonds will be sustained post-crisis.”
SUSTAINABLE FINANCE | GLOBAL CATEGORY WINNERS |
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Outstanding Leadership in Green Bonds
Outstanding Leadership in Sustainable Project Finance
Outstanding Leadership in Resource Management
DBS
In 2020, DBS underwrote SG$5.3 billion ($3.9 billion) worth of green bonds as part of sustainable financing transactions totaling more than SG$9.6 billion. It also served as bookrunner and manager for significant offerings such as the National University of Singapore’s SG$300 million, 1.565% fixed rate green bond—the first of its kind among universities in Asia. It will be used in the university’s efforts to make itself carbon neutral.
DBS is also financing efforts of Inditex Group, one of the world’s largest retailers, the parent of clothing brands such as Zara, to adopt “greener” practices. A significant user of cotton, the company seeks to use only sustainable, organic or recycled cotton by 2025. Inditex partnered with DBS for a pilot program arranging financing to small-hold farmer producer organizations (FPOs) in India. The funding DBS provides the farmers through the FPOs enables scale while increasing the financial well-being of the farmers themselves.
The bank is also attentive to its own resource management, and recently commissioned three new solar installations to increase its renewable energy capacity. In Singapore, it has upgraded branches to the meet the nation’s Green Mark Platinum standards for high sustainability—part of which entails reducing energy consumption by at least 30%. To guide future energy savings, the bank has completed design of net-zero-energy office concepts and developed a circular-economy materials catalog to help employees making purchasing decisions identify the most sustainable products.
Outstanding Leadership in Sustainable Bonds – Bank
Outstanding Leadership in Sustainable Infrastructure Finance
CITI
Citi’s sustainable bonds, along with its green bonds, count toward its overall sustainable finance goal of $500 billion in financing by the end of the decade, and the bank plans to allocate an additional $500 billion for investments toward related social goals, for a total of $1 trillion in ESG-dedicated capital by 2030. Among these financing efforts—such as microlending programs for women-led businesses in developing nations—are a $2.5 billion bond earmarked for the construction, rehabilitation and preservation of quality affordable housing for low- and moderate-income people in the United States, the largest-ever such bond from a private issuer in the US.
In 2020, Citi took a leading role in several sustainability-linked vehicles: as an active bookrunner on NRG Energy’s issuance of a $900 million SLB—the first such offering from a North American issuer and the first by any energy company outside of Europe; and as joint bookrunner on a €650 million issuance of a sustainability-linked convertible bond for the French multinational Schneider Electric—the first convertible bond linked to sustainability KPIs.
Citi was also strong in sustainable-infrastructure financing in 2020, serving, for example, as the bookrunning lead manager on a $500 million municipal bond issued by the Illinois Finance Authority and the state’s Clean Water Initiative, to finance wastewater treatment and sanitary sewage facilities.
Outstanding Sustainable Bond – Corporate
BAYFRONT INFRASTRUCTURE CAPITAL II
A Singaporean entity, Bayfront Infrastructure Capital II recently sold the first publicly issued securitized sustainability notes for addressing Asia’s infrastructure funding gap. The innovative notes are backed by cash flows from a US$401.2 million diversified portfolio of 27 bank-syndicated project finance and infrastructure loans for 25 projects in Asia-Pacific, the Middle East and South America. Standard Chartered was a global coordinator, joint lead manager and joint bookrunner.
Outstanding Leadership in Green Loans
STANDARD CHARTERED
When it comes to green lending, Standard Chartered stands out for product scope, geographic reach and industry breadth. The bank has been active with sustainability-linked loans: In March 2021, Stan Chart acted as joint lead manager for Singaporean shipping firm Hafnia’s US$374 million sustainability-linked secured loan facility, where Hafnia will have to outperform the International Maritime Organization’s decarbonization trajectory by 5% every year or pay more interest. Elsewhere, the bank broke new ground in India in March in the closing of a $1.35 billion project-finance term loan to finance construction of a 1.69-gigawatt portfolio of solar and wind renewable projects developed by Adani Green Energy—the first certified green hybrid project loan in India and the largest project-financing deal to date in the country’s renewable energy sector.
Outstanding Leadership in Blue Bonds
BANK OF CHINA
Oceans cover more than 70% of the planet, and maritime pursuits contribute more than $1 trillion annually to the economy. Yet thus far, only a handful of blue bonds—loosely defined as bonds written to promote ocean-related ESG goals—have been written. Last year, Bank of China issued the largest to date: a $942.5 million offering meant to support marine-related sewage treatment and offshore wind-power projects in that country.
Outstanding Leadership in Social Bonds
BANK OF AMERICA
In May 2020, Bank of America was the first US commercial bank to issue a social bond designed to help combat Covid’s impacts. The $1 billion bond provided targeted lending to key health-care institutions: not-for-profit hospitals, nursing facilities and manufacturers of equipment and supplies. Additional BofA financing to improve the public welfare includes a $1.25 billion commitment to advance racial equality and economic opportunity. As part of this effort, the bank dedicated $200 million to venture capital and other funds owned and managed by Black, Latin American, Asian, Native American, female and other underrepresented entrepreneurs, and within months boosted the fund to $350 million.
Outstanding Leadership in Sustainability Transparency
SCOTIABANK
Scotiabank’s annual ESG report discloses its management approach and its performance on ESG metrics. The bank’s 2020 reporting was prepared in accordance with leading voluntary ESG disclosure frameworks, including recommendations from the Sustainability Accounting Standards Board, the Global Reporting Initiative and the Taskforce on Climate-related Financial Disclosure (TCFD). (The bank has included TCFD-related disclosures in its annual reports since 2018.) The bank has committed to support customers in the transition to a low-carbon economy; ensure robust, climate-related governance at the bank; manage climate-related risks; decarbonize operations; and contribute to the global dialogue on climate change. Scotiabank has committed to mobilizing $100 billion by 2025 to reduce the impacts of climate change throughout the bank-client ecosystem.
Financial Leadership in Sustaining Communities
BBVA
BBVA’s sustainability efforts merge concern for both the environment and its people, both in its historical home ground in Europe and in Latin America. The bank’s ESG framework includes a pledge to mobilize €100 billion in green financing, sustainable infrastructure, social entrepreneurship and financial inclusion efforts in the next four years. By 2030, it will no longer finance coal operations in developed countries. By 2040, it will no longer finance coal anywhere. The bank addresses the social arm of its ESG framework with institutions such as the BBVA Microfinance Foundation, which supports sustainability efforts among low-income entrepreneurs in Latin America. Despite the pandemic, between May 2020 and April 2021, organizations funded by the foundation disbursed $1.1 billion to more than 2.6 million entrepreneurs (60% of them women). In addition, the foundation trained more than 400,000 people. in financial and technical skills last year.
SUSTAINABLE FINANCE | REGIONAL WINNERS |
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AFRICA
Overall Outstanding Leadership in Sustainable Finance
Outstanding Sustainable Financing in Emerging Markets
SOCIETE GENERALE
Societe Generale (SocGen), our overall global honoree, has a particularly strong presence on the African continent, having been there for more than a century. Today, the bank operates in 19 African countries. In July, SocGen acted as sustainability structuring adviser to the Republic of Benin, which became the first African country to issue a bond that meets the UN SDGs. Proceeds from the €500 million ($590 million) issue will support the nation’s health-care, food and water needs, and boost access to clean energy. Benin is only the second sovereign to issue an SDG bond, following Mexico’s debut in September 2020. SocGen also served as sole arranger and co-lender in a $19 million transaction to support the debt funding of the largest solar power plant in Madagascar and accelerate the country’s green energy transition.
While green bonds get most of the attention in emerging economies, they are just a small part of the sustainable finance picture there, according to Societe Generale. SocGen’s African teams, for example, are contacts of choice for many microfinance institutions, where the Group’s exposure now exceeds €85 million. “Africa is emerging, mainly on the public sector/sovereign side at the moment, but its needs are huge,” says SocGen’s Hacina Py. “The growth may not be as fast as in other regions just yet, but it will definitely pick up.”
Outstanding Leadership in Sustainable Finance by a Multilateral Institution
TDB
Established in 1985, TDB (the Trade and Development Bank) works with 22 economies across Africa, with an emphasis on sustainable development. At the end of 2020, 73% of TDB’s portfolio exposure was for transactions that had low or no environmental or social risk. During the Covid crisis, TDB pitched in with $1.5 million worth of medical equipment such as testing kits and patient monitors, as well as personal protective equipment such as goggles and biohazard suits. The bank also installed water facilities in underserved communities.
Outstanding Leadership in Sustainable Bonds
Outstanding Leadership in Green Bonds
Outstanding Leadership in Social Loans
STANDARD BANK
South Africa’s largest bank by assets, Standard issued Africa’s largest-ever green bond in 2020. The $200 million London Stock Exchange–listed bond, issued via private placement with IFC, was also South Africa’s first offshore green bond issuance.
Standard Bank also acted as sole arranger and sustainability agent in the launch of Africa’s first sustainability-linked bond, in March 2021. The issuer, which operates hospitals in South Africa, will benefit from a step down in the coupon rate if it achieves climate and water targets linked to the bond.
The African continent suffers from an energy deficit, “yet the continent has rich solar and wind potential,” says Greg Fyfe, head of Sustainable Finance at Standard Bank. For this reason, green loans and bonds for renewable energy, and particularly off-grid energy, “are particularly well suited to incentivize much-needed investments,” he adds, “unlocking capital for the development of the green economy across our continent.”
Outstanding Leadership in Sustainable Infrastructure Finance
Outstanding Leadership in Social Bonds
STANDARD CHARTERED
Standard Chartered, cited for global leadership in green lending, is active on the African continent, where it served as sole sustainability structuring agent for Ecobank Transnational when it raised $350 million in Tier 2 sustainability notes in early June—the first sustainable notes issuance from sub-Saharan Africa. StanChart is also a leader in finance on the social side, expected to play a role in Ghana’s plans to raise $1 billion via sustainable bonds, including the country’s first social bond.
Outstanding Leadership in Sustainability Transparency
Outstanding Leadership in Green Loans
ACCESS BANK
One of Nigeria’s three largest banks, Access is one of the continent’s earliest adopters of sustainable finance initiatives and is publishing its 13th annual sustainability report. In March 2020, the bank completed the listing of its 15 billion Nigerian naira ($36.5 million) green bond on the Luxembourg Stock Exchange (LuxSE), the first bond listed on both the Nigerian Stock Exchange and the LuxSE. The bank has publicly embraced a “green strategy” that aims to expand its green assets by 10% a year.
Outstanding Leadership in Social Bonds
BANK OF AFRICA
The Mali-headquartered bank, with operations in 19 African countries, was recently rated in the top 2% among 4,880 global companies on environmental, social and governance (ESG) criteria by Vigeo Eiris, and first out of 90 among retail and specialized banks in emerging markets. Bank of Africa financed what is expected to be the world’s largest seawater desalination plant, in Morocco. When the project comes on line, it will have a treatment capacity of 75 million cubic meters a year, providing drinking water and irrigation in the parched Western Sahara.
Outstanding Leadership in Resource Management
ECOBANK
The Togo-based pan-African institution has embarked on an ambitious solar power initiative that will soon retrofit energy supplies to many of its buildings across 33 African countries. The bank recently installed over 1,728 solar panel grids with 970,000 kilowatt hours (kWh) of energy at its Togo headquarters. “On any day, more than 85% of the energy needs for the headquarters complex is sourced from solar energy,” according to the company.
Financial Leadership in Sustaining Communities
SOCIETE GENERALE MADAGASIKARA
The bank’s key initiatives include managing Madagascar’s forests in accordance with principles of sustainable development. The bank has long held that reforestation is a citizen action, and over the past 35 years as many as 400 of the bank’s employees annually have supported their communities by planting trees—nearly 130,000 trees in total.
Outstanding Leadership in Sustainable Loans
KCB GROUP
The Kenyan bank processed facilities worth $900 million in its lending portfolio in 2020 for social and environmental assessments. Overall, the opportunities for supporting sustainable development that will benefit the whole world are perhaps greatest in Africa, where the carbon footprint is low but emerging demands are large. —Andrew Singer
THE AMERICAS | LATIN AMERICA
Overall Outstanding Leadership in Sustainable Finance
SANTANDER
With a long history in Spain, Banco Santander is now working hard to implement sustainability initiatives across Latin America. The bank is cited specifically for the joint efforts of Santander Chile and Santander Mexico, as well as the group’s work across the continent, where, according to Bloomberg, it was the top issuer of green and ESG bonds in 2020. The bank’s sustainability and human rights policies align with the UN principles, the Paris Agreement and other frameworks. The bank limits investment and financing of soft commodities, defense, and mining and metals.
In Chile, Santander’s activities center on structuring and underwriting ESG bonds, loans and credit facilities. An astonishing 73% of all bonds underwritten by Santander Chile from May 2020 to April 2021 were green bonds, social bonds or sustainability bonds—for most banks, that ratio is well below 10%.
Banco Santander Mexico shows a similar dedication, working to mobilize €220 billion in green finance by 2030 and help customers transition to a low-carbon economy. Notable bond work in 2020-2021 includes acting as bookrunner for bonds focused on improving the financial autonomy of female agricultural workers, and on reducing emissions, improving water savings, and decreasing the use of agricultural chemicals. These efforts are embraced by the Santander group across the region. Santander Argentina led the placement of the country’s first sustainable bond. In Brazil, Santander partnered with IFC in a $50 million loan facility to support projects for renewable and more-efficient energy.
Financial Leadership in Sustaining Communities
BANISTMO
Banistmo finances projects that contribute to the national economy, its people and the preservation of natural resources. It works to empower women, supporting female entrepreneurs with credit. During the first quarter of 2021, its Impulsa program trained more than 1,000 women in entrepreneurship, with 98% of participants reporting a benefit from the training. Additional programs include sea turtle conservation. Banistmo programs have helped release more than 350,000 sea turtles into the waters off coastal communities since 2014—strengthening tourism in those towns.
Outstanding Leadership in Green Loans
Outstanding Leadership in Resource Management
PRODUBANCO
Green loans total about 4% of all Produbanco’s commercial loans. Its Green Lines program, now in its sixth year, is aimed at financing businesses and projects with positive environmental and social impacts. The bank works with Conservation International to maintain water resources in Ecuador. As part of its internal resource-management program, Produbanco has developed a program of Corporate Eco-efficiency and Use of Resources, with a detailed manual for the bank and its subsidiaries aligned with environmental principles. Sustainability working groups are designated for each bank department so that all employees understand their role in sustainability.
Outstanding Leadership in Sustainable Loans
Outstanding Leadership in Sustainability Transparency
BANCOLOMBIA
Bancolombia issued Colombia’s first sustainability-linked lending vehicle—a $108 million credit agreement with Gruppo Argos cement and energy company. The interest rate is tied to greenhouse gas reduction and more women in upper management at Grupo Argos. The bank’s comprehensive website offers significant detail on its sustainability policies and metrics.
Outstanding Leadership in Sustainable Project Finance
Outstanding Leadership in Social Bonds
BBVA
By the end of the first quarter of 2021, BBVA reached €59 billion in sustainable financing. This puts the bank more than halfway to its goal of €100 billion in sustainable financing by 2025. In 2020, BBVA led in the first green bond issuance for Argentina’s Petroquímica Comodoro Rivadavia’s, raising $50 million for wind energy projects. Between April 2020 and March 2021, BBVA completed a total of eight sustainability and social-linked transactions in Latin America. These include landmark deals like the first sustainability-linked financing in Colombia, for €10 million, and multiple social bonds targeting gender equality in Mexico.
Outstanding Sustainable Financing in Emerging Markets
BTG PACTUAL
During 2020 and 2021, BTG Pactual expanded its investment banking activities in sustainable finance—structuring, managing and distributing new funds with a strong sustainability focus. It launched a landscape capital strategy within a $3.5 billion timberland portfolio, targeting up to $1 billion for reforestation of degraded lands. Its Impact Investing Fund allocated $130 million for private equity investment in small and midsize businesses that strive to enact positive social and environmental change. It launched a carbon trading platform. In the first quarter of 2021, it developed Research ESG, a program designed to help investors understand ESG opportunities and risks. In the social realm, the bank offers $1.7 million in support for micro entrepreneurs, helping tiny businesses recover from the Covid-19 crisis.
Outstanding Leadership in Green Bonds
BANCO DE BOGOTA
Last September, Banco de Bogota issued its first green bond, which was hugely oversubscribed, to finance projects that generate positive environmental impact and mitigate climate change. Areas of focus include clean water, sanitation, and affordable and clean energy. This single transaction accounts for 30% of the total bonds issued by the bank from May 2020 to April 2021 and helped vault the bank into S&P Global’s Sustainability Yearbook for 2021.
Outstanding Leadership in Sustainable Bonds
ITAÚ UNIBANCO
In 2020, Itaú Unibanco structured its first sustainable debentures in the Brazilian market, in the amount of one billion Brazilian reais (about $193 million at the end of August). Annual interest rates are tied to compliance with sustainability targets related to the increased consumption of renewable energy and the reuse of solid waste. The bank also structured sustainable bonds for Banco Votorantim and BTG Pactual.
Outstanding Leadership in Social Loans
BANCO PICHINCHA
Banco Pichincha is one of the original 28 banks developing the UN Principles For Responsible Banking. The bank is striving to facilitate $500 million in sustainable finance by 2025, in part through its Bio Credit program. As of late 2020, the program had disbursed more than $114 million and benefited nearly 5,500 customers. Banco Pichincha’s microfinance social-lending program has thus far disbursed $957 million to more than 263,000 micro entrepreneurs.
Outstanding Sustainable Infrastructure Finance – Corporate
ENEL CHILE/ENEL AMERICAS
Enel Americas and Enel Chile are jointly recognized for their leaderhip in sustainable infrastructure finance. The companies, both owned by Italy’s Enel Group, are at the forefront of innovation and sustainability in South America’s utilities sector. Enel Americas does not produce nuclear energy and its coal generation represents less than 2% of its overall generation. It has a superior ESG risk rating from ratings firm Sustainalytics, 16th out of 631 in its industry group as of June 2021.
In 2021, Enel Americas added 3.6MW of renewable energy through its merger with EGP Americas, and it expects 73% of energy to be generated from renewable sources by 2023. It recently developed a new business line, Enel X, that promotes energy efficiency and the use of clean energy. Elsewhere, Enel Chile is making strides in marine power generation, recently installing Latin America’s first full-scale wave energy converter off the coast of Las Cruces in the Valparaíso region. —Laura Spinale
THE AMERICAS | NORTH AMERICA
Overall Outstanding Leadership in Sustainable Finance
Outstanding Leadership in Sustainable Loans
Outstanding Leadership in Social Bonds
Bank of America
Bank of America provides ESG-based financial products and services throughout North America. Since 2013, it has issued eight corporate ESG-themed bonds totaling $9.85 billion. It is also a top underwriter in ESG capital markets globally. In social financing, Bank of America issued the first US social bond designed to help combat Covid-19. The $1 billion bond provided targeted lending to health-care institutions on the Covid-19 front lines: not-for-profit hospitals, nursing facilities and manufacturers of health-care equipment and supplies. Additional Bank of America financing to improve the public welfare includes a $1.25 billion commitment to advance racial equality and economic opportunity. Sustainable loan offerings include green loans and affordable housing loans.
Outstanding Leadership in Green Bonds
Outstanding Leadership in Green Loans
Outstanding Leadership in Sustainable Bonds
Outstanding Leadership in Social Loans
Outstanding Leadership in Sustainable Infrastructure Finance – Bank
Outstanding Sustainable Financing in Emerging Markets
CITI
Citi has been active in the green bond market since co-founding the Green Bond Principles in 2014. In 2020, it issued its first US dollar-denominated benchmark green bond. The bank also offers green loans: Citi Community Capital provided a $15.7 million construction loan and a $3.05 million permanent loan for the construction of Berendo Sage, a 42-unit LEED gold-certified affordable housing project in Los Angeles.
Last September, Citi put a price on financial inequality with an analysis that concluded the US economy lost $16 trillion over 20 years due to racial gaps. “Providing fair and equitable lending to Black entrepreneurs might have resulted in the creation of an additional $13 trillion in business revenue over the last 20 years,” wrote then-Citi Research economist Dana Peterson.
Citi’s Scaling Enterprise program is a $100 million loan-guarantee facility that provides earlier-stage financing to companies that expand access to products and services for low-income individuals in emerging markets. The facility offers affordable loans and working capital in local currency. Citi’s infrastructure work includes serving as the bookrunning lead manager on a $500 million municipal bond issued by the Illinois Finance Authority and the state’s Clean Water Initiative.
Outstanding Leadership in Sustainability Transparency
Financial Leadership in Sustaining Communities
Outstanding Leadership in Sustainable Project Finance
SCOTIABANK
Scotiabank stands out for transparency. The bank’s 2020 reporting was prepared in accordance with leading voluntary ESG disclosure frameworks, including recommendations from the Sustainability Accounting Standards Board, the Global Reporting Initiative and the Taskforce on Climate-related Financial Disclosure.
Work supporting sustaining communities consists of a variety of products and initiatives. Scotiabank avoids any financing that would negatively affect sensitive ecosystems or the livelihoods and traditions of Canada’s Indigenous communities. Concurrently, it works to increase financial inclusion for their communities and businesses—achieving 12% customer growth between 2020 and 2021 among these populations. Its ScotiaRise program is a $500 million initiative offering financial products and services to improve financial education and address the root causes of financial hardship.
Scotiabank’s sustainable project financing in the past year has included acting as joint bookrunner on the Housing Investment Corporation’s $40 million, 40-year social bond to finance a mixed-use affordable housing project in Edmonton. Because the environment is part of any community, Scotiabank has committed to mobilizing $100 billion by 2025 to mitigate the impacts of climate change.
Outstanding Leadership in Sustainable Infrastructure Finance
ENEL GREEN POWER AMERICAS
Among nonfinancial companies, Enel Green Power North America stands out for its sustainable infrastructure finance. Part of Italy’s Enel Group, the company is a leading developer, owner and operator of renewable energy plants in North America, operating 58 facilities with a managed capacity of over 6.6GW powered by renewable wind, geothermal and solar energy—the fifth-largest portfolio of wind and solar plants on the continent.
Enel Green Power recently accelerated its US growth plans, adding new solar projects in the Mid-Atlantic and Western states. In July, it acquired a 3.2GW portfolio of 24 solar projects from Dakota Renewable Energy. Several of the projects feature paired battery storage to capture additional value streams and add resiliency to the power grid.
ASIA-PACIFIC
Overall Outstanding Leadership in Sustainable Finance
Outstanding Leadership in Sustainability Transparency
Outstanding Leadership in Sustainable Project Finance
Outstanding Leadership in Sustainable Loans
Outstanding Leadership in Social Bonds
DBS
DBS takes the overall award for Asia-Pacific for its across-the-board work in sustainable finance and transparency. DBS’ Responsible Financing Framework merges with its Sustainable Sourcing Principles to improve transparency in ESG operations, and includes nine sector guides detailing industry-specific ESG risks, referencing best practices as listed by significant environmental conventions. The Sustainable Sourcing Principles outline the bank’s expectations of suppliers in human rights, health and safety, environmental sustainability and business integrity.
These protocols help guide DBS as it strives to meet its goal of committing SG$50 billion (about US$37.2 billion) toward sustainable financing by 2024, a total that includes green loans, transition loans, sustainability linked loans and renewable financing. Social bonds include bonds related to Covid-19 response and bonds to finance microfinance loans to female entrepreneurs in Asia. Social programs include lower-interest business loans to social enterprises in Singapore to protect jobs and alleviate cash flow pressures during Covid-19 and for consumers, DBS Green Solutions, which include green renovation loans and green car loans.
Outstanding Leadership in Sustainable Finance – Multilateral
ASIAN DEVELOPMENT BANK (ADB)
Serving Asia’s dynamic economies gives ADB wide leeway to deliver on its sustainability pledges. In particular, ADB’s Trade and Supply Chain Finance Program has been forward-thinking in key infrastructure projects with an ESG bent, helping clients design operations to meet environmental criteria. Among the key projects cited are the Phu Yen Solar Project in Vietnam in partnership with Standard Chartered, and, in western Asia, Georgia’s Green Bond project (financing clean-water projects) as well as the Navoi Scaling Solar Power Project in Uzbekistan. The bank reached its goal of $6 billion in climate financing by 2020 a year early.
Outstanding Leadership in Green Bonds
BANGKOK BANK
Bangkok Bank’s work in green bonds includes acting as joint lead arranger for a 15-year bond from Thailand’s Ministry of Finance for green mass rail development—a bond that also included financial help for those impacted by Covid-19. The Bank also worked on a bond for Global Power Synergy Public Co., to finance solar projects and waste energy plants; a bond for BTS Group Holdings to elevate Bangkok’s electric mass transit infrastructure; and a bond for Toyota Leasing Thailand to finance loans for less-polluting autos.
Outstanding Leadership in Green Loans
POSTAL SAVINGS BANK OF CHINA
As at the end of 2020, the Postal Savings Bank of China’s green loan balance reached ¥280.9 billion (about $43.4 billion), representing a 30.2% increase over 2019. Corporate green loans totaled ¥271.5 billion, representing 13.7% of corporate loans issued by the bank in the same period. Among these green loan activities are the bank’s financing of an emissions-reduction and pollution-control fund for the Beijing-Tianjin-Hebei region, to improve air quality. The bank also issued a “Carbon Absorption Loan” in the Hangzhou Yuhang district—the source of more than 80% of the world’s bamboo flutes—to make the flute supply chain more environmentally friendly.
Outstanding Leadership in Sustainable Loans
CHINA MERCHANTS BANK
At China Merchants Bank, sustainability starts with an eco-friendly society. The bank is working to build that society through the establishment of a green, social responsibility and sustainability bond framework to provide guidelines for its bonds in those categories and to determine which projects to finance for environmental and social benefit. Proceeds center on financing green industries for both environmental benefit and job creation. Projects include helping cities build efficient and eco-friendly transport systems.
Outstanding Leadership in Resource Management – Bank
BANK OF THE PHILIPPINE ISLANDS
Bank of the Philippine Islands views digitalization as the path to improved resource management. By the end of 2020, 92.3% of all bank interactions were digital. Digitalizing credit card operations and billing saved more than 31.5 million sheets of paper by the end of 2020, the bank estimates. Bank branches have also been retooled with resource management in mind: LED lights and more-efficient air conditioning. The bank also seeks to protect natural resources externally, rejecting potential customers whose activities it believes would violate Philippine forestry, fishing and wildlife conservation acts.
Outstanding Leadership in Resource Management – Corporate
BANGALORE INTERNATIONAL AIRPORT
India’s Bangalore International Airport Ltd. (BIAL) aspires to be a flag-bearer for sustainable operations in the region. In 2021, BIAL announced that it had met one of its key sustainability goals: net energy neutrality. All the energy used to power operations at its Kempegowda International Airport Bengaluru (BLR) now comes from renewable sources, primarily solar and wind. The airport makes optimal use of natural light, too, avoiding artificial illumination as much as possible during daytime hours. At the leading edge of sustainability, BLR also became “water positive” in 2020—it harvests 750 million liters of rainwater each year.
Outstanding Leadership in Sustainable Finance in Emerging Markets
STANDARD CHARTERED
Standard Chartered’s projects and initiatives span Asia from east to west, including: green bonds for the Pakistan Water Authority and for Vietnam’s BIM Group, and a $2.5 billion issuance for the government of Indonesia that included a $750 million green sukuk. These are a small sample of StanChart-supported infrastructure projects in developing Asia. The bank played a role in the Women’s Livelihood Bond, and, for the government of Thailand, the first sovereign sustainability bond in ASEAN. In 2020 alone, StanChart supplied $509 billion to microfinance institutions in Bangladesh, India and Indonesia. In 2021, the bank has helped clients issue more than $26 billion, already surpassing 2020’s total.
Outstanding Leadership in Sustainable Infrastructure Finance
CTBC TAIWAN
CTBC is helping to finance the largest offshore wind project in Taiwan, the 589 MW Changfang and Xidao project. The electricity generated will be sold to Taiwan Power Company under a 20-year purchase agreement. CTBC acted as local coordinating bookrunner for the deal. It drummed up investment from seven Taiwanese financial institutions, which together provided more than 30% of the funding for this project.
Financial Leadership in Sustaining Communities – Bank
SIAM COMMERCIAL BANK
Siam Commercial Bank’s work in sustaining communities encompasses sustainable finance and positive social impact. In the consumer realm, SCB promotes access to digital lending for more than 82,000 low-income individuals. Through various programs, it helps consumers—including those just entering the workforce—improve their financial planning skills. Programs for a positive social impact include Covid-19 relief and a food delivery platform that generates income for more than 50,000 small restaurants and their employees. SCB is also is working to reduce its energy consumption by 35%, indirect greenhouse gas emissions by 41% and waste disposal by 59%, among other metrics.
Financial Leadership in Sustaining Communities – Corporate
COLES GROUP
Coles Group has been open about its ambition to become Australia’s most sustainable supermarket. In a year marked by drought, bushfires and Covid-19, Coles and its customers, employees and suppliers contributed AU$125 million (about US$91.2 million) in cash directly to support communities across Australia—20% more than the previous year. On the ecological front, as of July Coles no longer sells single-use plastic dining and tableware products. —Laura Spinale
EUROPE | CENTRAL & EASTERN EUROPE
Overall Outstanding Leadership in Sustainable Finance
Outstanding Leadership in Green Bonds
Outstanding Leadership in Sustainable Bonds
RAIFFEISEN BANK INTERNATIONAL
Austria’s Raiffeisen Bank International (RBI) heads the list of honorees in CEE, taking the overall top honor as well as both green bond and sustainable bond categories. Ten percent of all bonds arranged by RBI from May 2020 to April 2021 were green. In Austria and CEE, the bank was the second-largest arranger of green or sustainable bonds in 2020, trailing only JPMorgan—and first by number of transactions, per Bloomberg. In June 2021, RBI was the first bank to issue a green bond out of the Czech Republic.
Financial Leadership in Sustaining Communities
Outstanding Leadership in Resource Management
Outstanding Leadership in Sustainability Transparency
CSOB
CSOB’s new campus building is a picture-perfect example of how the Czech Republic’s largest bank envisions future work environments: The structure draws on 177 geothermal wells with four heat pumps as a source of renewable energy for both heating and cooling. It uses rainwater to irrigate green roofs and greenery and to provide drinking water. All its buildings are equipped with charging points for electric cars and e-bikes.
Outstanding Sustainable Financing in Emerging Markets
Outstanding Leadership in Social Bonds
RENAISSANCE CAPITAL
Russia’s Renaissance Capital stands out in the CEE. In January, the investment bank was joint lead manager and joint bookrunner in Sovcombank’s offering of the first-ever social bond by a CIS institution—a $300 million issuance the proceeds of which will expand financing opportunities for low-income families. —Andrew Singer
EUROPE | WESTERN EUROPE
Overall Outstanding Leadership in Sustainable Finance
Outstanding Leadership in Sustainable Infrastructure Finance
Outstanding Leadership in Green Bonds
BBVA
If green, social and sustainability bonds still dominate the sustainable finance conversation, it is European firms that drive sustainable bond issuance, accounting for 60% of the market, according to Refinitiv, and BBVA is a strong competitor. S&P Global declared BBVA the world’s second most sustainable bank in 2020; while the Spanish bank also received an AAA rating (excellent) from MSCI. BBVA became carbon neutral in direct CO2 emissions in 2020.
BBVA set itself a goal several years back: to reach €100 billion in sustainable financing by 2025. In the first quarter of 2021, it passed the halfway mark and then some (€59 billion)—a year ahead of schedule. While being a driving force in sustainable debt financing globally, the bank hasn’t neglected its native Spain. It recently signed a long-term loan with Copenhagen Infrastructure Partners to build 12 onshore wind farms in Spain’s Aragón region. BBVA played all significant roles in the €380 million financing deal.
Outstanding Leadership in Sustainable Bonds
Outstanding Leadership in Sustainable Loans
ING
In February, the Netherlands’ ING Group acted as joint sustainability coordinator with Santander in the largest sustainability-linked revolving credit facility (RCF) ever issued: Anheuser-Busch InBev’s $10.1 billion RCF, which has a pricing mechanism that incentivizes the beverage company for improvement in four performance areas: water efficiency, polyethylene terephthalate recycled content, electricity from renewable sources and reduced greenhouse gas emissions. ING ranked third globally in sustainable bonds (by volume) from May 2020 to April 2021, according to Bloomberg, with 45 issues that totaled €5 billion, surpassed only by BNP Paribas and UniCredit.
Outstanding Leadership in Sustainable Project Finance
SANTANDER
In 2020, Spain’s Banco Santander, a leader in financing renewable energy projects, acted as MLA, lender, ECA agent and facility agent in the $3.5 billion Dogger Bank UK Offshore Wind project, the largest offshore wind finance project to date. When it is operational in 2023, Dogger Bank will produce enough renewable energy to supply 5% of the UK’s demand—about six million homes each year. Overall, Santander’s renewable energy project finance portfolio (greenfield and brownfield) totaled €11.6 billion spread over 307 transactions at the end of 2020.
Outstanding Leadership in Resource Management
COMMERZBANK
Germany’s Commerzbank is out front in resource management, having long ago switched to 100% renewable energy. The bank banned disposable cups in 2018 and switched to 100% recycled paper in 2019. The bank works to make sustainability visible—each year publishing its CO2 emissions per capita (i.e., for Commerzbank employees) and likewise for paper and water consumption and also electric power. It also documents its volume of sustainable bonds (green, social and sustainable), which rose dramatically from 12 billion euro-equivalent in 2019 to €46.3 billion in 2020.
Outstanding Leadership in Social Bonds
CAIXABANK
Caixa issued its inaugural social bond in 2019, the first by a Spanish bank linked to the UN SDGs. The bank followed in 2020 with a social bond aimed to curb the effects of Covid-19 by funding small and midsize enterprises and microenterprises in Spanish regions with high unemployment. In 2021, the bank issued a third social bond to finance projects to combat poverty, promote education and spur economic development in disadvantaged areas. Overall, between July 2019 and May 2021, the bank issued four green bonds and three social bonds, for a total value of €6.5 billion, positioning CaixaBank as the European bank with the highest volume of ESG bonds issued on the euro credit market.
Financial Leadership in Sustaining Communities – Corporate
SEVERN TRENT WATER
In July 2020, Severn Trent Water (STW) beat four other English water companies invited to submit plans to the government to “build back greener” from the Covid-19 pandemic. Severn will manage a £565 million (about $778 million) investment for six environmental projects that range from removing old lead pipes, to discovering innovative nature-based flood solutions for large market towns, to creating bathing-quality stretches of the Leam and Teme rivers. The projects are expected to create 2,500 jobs. Severn launched its first sustainability-linked revolving credit facility in April 2021. The £1 billion RCF is linked to several sustainable KPIs, all measurable, covering both the green and the social aspects of STW’s activities.
Outstanding Leadership in Sustainability Transparency
LGT
Nearly 20 years ago, LGT started to embed ESG clauses in its investment programs; and 10 years back, it began to set concrete sustainability goals. Currently, LGT tracks the ESG performance of around 7,500 companies and 200 countries and translates this data into its own sustainability rating, which “provides transparent information about the sustainability quality of investments” for its clients. In November, German investor magazine Fuchsbriefe ranked LGT as the best bank for sustainable investments in the German-speaking countries.
Financial Leadership in Sustaining Communities – Bank
SPUERKEESS LUXEMBOURG
Spuerkeess Luxembourg was the first bank in Luxembourg to sign on to the UN Principles for Responsible Banking. The bank included social criteria in two new funds: Lux-Bond Green and Lux-Equity Green. Its Etika accounts enable citizens to support ESG goals with their deposits. Since 2012, the bank has consistenly qualified as a socially responsible company by Luxembourg’s National Institute for Sustainable Development and Social Responsibility. —Andrew Singer
MIDDLE EAST
Overall Outstanding Leadership in Sustainable Finance
Outstanding Leadership in Green Loans
FIRST ABU DHABI BANK
After establishing a green finance framework in 2017, First Abu Dhabi Bank issued the nation’s first green bond: a $587 million on the London Stock Exchange. The bank now has six outstanding green bonds, valued at a total of $1 billion—putting it at the top of the Middle East market in both number and value of bonds. The bank is also at the forefront of the market as a bond lead manager and bookrunner. First Abu Dhabi Bank’s leadership in green loans includes providing sustainable development loans for Etihad Airways and managing the Abu Dhabi Housing Authority’s efforts to provide UAE nationals with noninterest loans to build their homes.
Outstanding Leadership in Green Bonds
Outstanding Sustainable Financing in Emerging Markets
QATAR NATIONAL BANK
In 2020, Qatar National Bank issued a $600 million green bond, the first for a Qatari bank. This is just one of the bank’s efforts. Other work is designed to improve health and the environment, arts and culture, economic and international affairs, social and humanitarian efforts, youth and education and sport. Specific projects include products to improve financial inclusion for low-income Qataris, financial management education and development of a global sustainability framework to support the transition to a more sustainable economy. In support of these efforts, the bank now has 32 sustainable products in its portfolio. Many of these products are designed to improve the environmental activities of retail clients. These include green financing for eco-friendly vehicles and e-receipts at ATMs.
Outstanding Leadership in Sustainability Transparency
NATIONAL BANK OF BAHRAIN
In 2020, NBB became Bahrain’s first financial institution to publish a sustainability report covering the bank’s sustainability philosophy and framework. Details available to the public on the bank’s website includes a three-year sustainability road map aligned to its business strategy. Measurable sustainability KPIs are assigned to bank departments, divisions and individual employee behavior.
Outstanding Leadership in Sustainable Project Finance
SABB
The Red Sea Project is a “giga project” —roughly 28,000 square kilometers of islands, beaches, desert and mountains—being built to attract visitors to the Saudi western coast, and expected to increase Saudi GDP by several billion per year. The Saudi Arabia British Bank acted as one of the lead arrangers for $3.76 billion in project financing. Its HSBC affiliate served as green loan coordinator—making sure the project is built taking into account such issues as fisheries regulation, conservation zones, the expansion of green and blue habitats and the removal of invasive species.
Financial Leadership in Sustaining Communities
CIB
The leading private sector bank in Egypt, CIB, in 2021 issued Egypt’s first green bond. The $100 million issuance, which supports development projects that align with the UN SDGs, is only one of CIB’s efforts. It issues green loans through the CIB Green Credit Line, which supports corporate customers that want to achieve economic growth through environmentally targeted projects and practices. It offers solar loans with special financing for consumers who want to buy and install solar panels, and has programs to help abate pollution in Egypt. —Laura Spinale
