An interview about sustainable finance with Judith Hartmann, Executive Vice President, Chief Financial Officer in charge of supervision of the United Kingdom and North America Business Units, and Paulo Almirante, Executive Vice President in charge of the Generation Europe, Brazil, North, South and Eastern Europe, Middle East, South and Central Asia and Turkey Business Units and of Social and Environmental Responsibility.
ENGIE has been a proponent of sustainable finance for several years now, in particular through issuing green bonds. What are the reasons behind this?
P. Almirante: In 2014, ENGIE positioned itself as a leader in the energy transition by actively supporting the development of sustainable finance. Green bonds – bonds used to fund projects that fight global warming – are an essential part of this.
J. Hartmann: Today, the green bond market is one of the most visible and best developed tools in sustainable finance, and green bond funds can make a major contribution to meeting the targets of the Paris Agreement. According to recent estimates from the OECD, in the next 15 years we will need to find $93bn if we are to make low carbon targets a reality. At ENGIE, we firmly believe in the need to bring the company’s long term vision and the objectives of investors into alignment. Green bonds are a key vector to move the energy sector along in this direction.
P. Almirante: Since 2014, ENGIE has issued four rounds of green bonds, for a total value of €6.25bn, making it the world’s biggest corporate issuer of green bonds. Today, the success of green bonds shows that market players have a clear grasp of their potential: in 2017, green bonds achieved a record value of €120bn!
What concrete effects have you seen after ENGIE has issued its various green and/or hybrid bonds?
P. Almirante : Green bonds have enabled ENGIE to fund the development of renewable energies, as well as to reach its renewable capacity target in its energy mix. And indeed, the benefits of green bonds go beyond just the environment. These projects also help meet social and societal criteria that go far beyond environmental concerns. And all of these criteria are audited by the Statutory Auditors. Thus, green bonds play a role in developing our energy efficiency activity, in developing the R&D applied to the energy transition, as well as the projects run by ENGIE Rassembleurs d’Energies, our social and environmental impact investment fund whose work has helped two million people to date.
J. Hartmann : From the moment they were issued, green bonds also helped the Group to diversify its range of investors, to get all of our people involved in innovative sustainable projects, and promote our strategic orientations, especially in terms of innovation. By encouraging us to provide more information, over time green bonds have also become a source of greater transparency on the impact our projects have on society and the environment. This is totally in sync with the demands of mainstream investors, for whom the appeal of this kind of bond grows greater every day.
Do you think that international initiatives, of the kind ENGIE has launched in partnership with major French and European companies, are an effective way of fostering the development of sustainable finance?
J. Hartmann : At ENGIE, we believe that investors’ already considerable interest in sustainable finance will only continue to grow as major industrial companies bolster their operations in this market. To that end, we are pushing ahead with our commitment to green bonds by making them a long term feature of our funding policy, and implementing strict reporting methods to accompany them.
P. Almirante : In addition to regularly publishing information on the allocation of funds, we also want to highlight the environmental impact of the projects we finance, by engaging in regular dialog with investors and all other stakeholders. ENGIE has formed a Green Bond Committee which is jointly coordinated by the Group CSR and Finance Departments, and which approves which projects are accepted for this style of funding. More generally, ENGIE is fully on board with the international green bonds movement, as can be seen in its proactive role in the various organizations that promote sustainable finance: ENGIE is a signatory to the Paris “Green Bonds” commitment at Climate Finance Day 2017, alongside eight of the main industrial issuers, it is a member of Green Bonds, and a partner in the Finance for Tomorrow initiative from Paris Europlace.