What is meant by sustainable finance?
Sustainable finance or green finance refers both to the allocation of financial resources to projects with positive social and environmental impact and the tools that will accelerate their implementation. At ENGIE, sustainable finance is a tool for financing energy efficiency, renewable energy, energy storage, electricity infrastructure and green mobility projects. These projects contribute to reducing CO2 emissions. Through the concept of sustainable finance, the Group’s various actions can also be combined to maximize its positive impact: responsible taxation, ambitious CSR (Corporate Social Responsibility) objectives, investments in companies working to achieve the UN’s Sustainable Development Goals, etc.
Green bonds, sustainable finance tools for the energy transition
ENGIE is now the leading corporate issuer of green bonds, representing a total amount of more than €11 billion issued since 2014. They are financial tools for financing the development of renewable energy or energy efficiency projects. ENGIE issues them on a bond market; financial players buy them against a fixed and guaranteed income over a specified period.
In 2020, more than one third of the bonds issued by the group are green. These tools contribute to ENGIE’s transformation towards carbon-free assets and energy services. The Group publishes an impact report whenever a green bond is issued, allowing it to calculate the CO2 emissions that have been avoided or reduced. The main projects financed by the Green Bond issue in January 2019 should help prevent the emission of at least 3.43 million tonnes of CO2eq per year.
Projects that can potentially be financed by green bonds are required to comply with the ethical, social and environmental criteria laid down in a framework devised by the extra-financial rating agency, Vigeo Eiris.
Responsible taxation, a driver of sustainable finance
ENGIE now considers carbon impact a disqualifying factor in investment decisions. “The major trend is the increasing integration of CSR criteria and the internal price of CO2 into our investment decisions in the same way as financial criteria,” explains Judith Hartmann, ENGIE Group EVP and Chief Financial Officer. In concrete terms, applying an internal carbon price means ensuring that investments would still be profitable after the application of a carbon tariff by legislation.