Background

In the past decade, the green bond (or more generally the concept of green financing) market has emerged and grown. It gave the investors the opportunity to align their pursuit for financial returns with their pursuit for environmental benefit by ascertaining that the investment proceeds get channeled through to green assets – e.g. clean energy assets. However, there are other equally important development issues that need to be addressed – sustainable development goals (SDGs) - which many countries have committed to prioritize and achieve by 2030. Experts estimate that roughly $5 – 7 trillion financing is needed to develop sustainable infrastructure. The ability to catalyze financing for these investments will be key to achieve these ambitious sustainable development agendas.

Governments, private institutions, and individual investors have increasingly become more conscious of environmental, social, and governance issues that hinder economic transformation and sustainable growth. With recent developments in international policies creating awareness for and guidance in the development and design of infrastructure aimed at achieving SDGs, capital markets will inevitably want to move one step further to support projects that aim to achieve positive environmental and social impacts.

Objectives

The objective is to explore new thematic financing in the clean energy sector. As we started to see new thematic bonds/financings, beyond green, that aim to address various social themes (e.g. blue bond), the workshop explores what thematic financing concept (e.g. gender, governance, etc) could be effective in clean energy space, and how it can be implemented. This would provide the investors to pursue ‘financial return + green + X’. Subject experts will be invited to provide insights for ADB and ACEF participants through a panel discussion.

Agenda

Time (Manila) Activities
2:00-2:30 p.m. Introduction/Presentation Noel Peters:  Opening Remarks (What is SGD Financing? Introduction of Speakers) – 3 minutes Mark Robinson: Presentation – 9 minutes DNV is one of the world’s leading certification, assurance and risk management provider.  It certifies a company’s management system or products, provides training, or assess supply chains and digital assets to help these companies in their decision making process.  DNV works closely with their customers to transition and realize their long-term strategic goals sustainably while collectively contributing to the UN Sustainable Development Goals.
  1. Introduction
  2. The key Sustainable Finance mechanisms.
  3. Key tools stages of a deal.
  4. What it takes to achieve an SPO or Certification.
  5. Impacts, Reporting and the SDGs.
David Jenkins: Presentation - 9 minutes The National Australia Bank (NAB) leads both the Australian and global market in sustainable private sector investment. NAB believes in investments that create both positive social and environmental impact; and financial return while maintaining high standards of governance. In 2014, NAB was the first Australian lender to issue a green bond in the amount of AU$ 300 million. By the end of 2020, NAB, together with its subsidiaries have issued approximately AU$4.1 billion of green bonds and green deposits that have been certified under the Climate Bonds Standard to be consistent with the goals of the Paris climate Agreement. This puts the bank among the top 10 in the Climate Bond initiatives.   The proceeds of these issuances were allocated to finance a large portfolio of climate bond standard eligible projects located across Australia, NZ, UK , USA and Europe. These investments contribute towards meeting the United Nations Sustainable Development Goals (SDGs). The Bank continues to work towards aligning their long-term goals with SDGs, prioritizing those SDGs where it believes it would have the biggest impact, such as (i) affordable and clean energy (#7), (ii) decent work and economic growth (#8), (iii) industry, innovation and infrastructure (#9); (iv) sustainable cities and communities; (v) climate action; (vi) life on land.
  1. NAB’s commitment to sustainability, why we do it and what it means – Founding bank to the UN PRBs, signatory to the CCCA
  2. Why is the focus on sustainability, supporting the transition to meet the goals of the Paris Agreement and the UN SDGs so important for NAB and our customers.
  3. The explosion in sustainable investing and what that means
  4. Examples of SDG labelled Use of Proceeds or Behavioural (sustainability-linked) type financing  – Use of proceeds (green, social, sustainability or SDG bonds) vs sustainability-linked or SDG- linked  bonds or loans (e.g. the ENEL Sustainability linked bond)
  5. Identifying, mapping and reporting SDG contributions of debt instruments
Nicole Della Vedova: Presentation - 9 minutes The Potential of Sustainability-Linked Financing (The Enel: Sustainable Finance Experience) The concept of sustainability through innovation has been at the heart of Enel’s strategy since 2015.  For Enel, innovation was not just a question of technology but a broader concept that include finance. To this end, Enel was the first in the world to launch in 2019 an innovative security – the SDG-linked bond.  This instrument was not just a green bond linked to the implementation of an individual sustainability project, but a bond linked to the entire strategy of Enel centered on the goals of the United Nations Sustainability Development Goals (SDGs) with clear targets that are measurable annually.    In October 2020, Enel launched its Sustainability Linked Financing Framework.  Enel has centered its strategy around the achievement of Sustainable Development Goals (“SDGs”) across all of its activities, with SDG 13 on Climate Action as the cornerstone of the strategy.This Framework explains how the company’s approach in linking the sustainability strategy of Enel (or its subsidiaries) as issuer or borrower to the terms of general corporate purposes debt, incentivizing the achievement of pre-determined Sustainability Performance Targets (SPTs) within a pre-determined timeline. Enel’s SDG-Linked Bonds issued in September 2019 marked the beginning of the Sustainability-Linked Bond Market. Enel then expanded the range of its Sustainability-Linked Financing instruments in 2020 with SDG-Linked Loans and Revolving Credit Facilities, as well as a Sustainable Development Goal (“SDG”) 7 (Affordable and Clean Energy) Target Guaranteed Euro-Commercial Paper Programme, showcasing how sustainability can be integrated across the financing tools of the company. Ms. Della Vedova will discuss Enel’s sustainable finance journey and the transformation of the capital markets as a result of their financing innovation.
2:30-3:00 p.m. Panel Discussion
3:00-3:30 p.m. Q&A Session
Speakers:
  • Moderator: Mr. Noel Peters, Principal Safeguard Specialist, Private Sector Operations Department, ADB
  • Presenter and Panelist: Mr. Mark Robinson, Sustainability Manager, Supply Chain and Product Assurance, DNV Business Assurance Pty Ltd.
  • Presenter and Panelist: Mr. David Jenkins, Global Head of Sustainable Finance, Corporate & Institutional Banking, National Australia Bank
  • Presenter and Panelist: Ms. Nicole Della Vedova, Head of Corporate Finance, Enel SpA

About Organizers

The Asian Development Bank (ADB) envisions a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty in the region. Despite the region's many successes, it remains home to a large share of the world's poor: 263 million living on less than $1.90 a day and 1.1 billion on less than $3.20 a day. ADB assists its members, and partners, by providing loans, technical assistance, grants, and equity investments to promote social and economic development. ADB maximizes the development impact of its assistance by facilitating policy dialogues, providing advisory services, and mobilizing financial resources through cofinancing operations that tap official, commercial, and export credit sources.

Point of Contact

Christine Genalin Uy, Asian Development Bank Email: cguy@adb.org Yuichiro Yoi Org: PSOD, ADB Email: yyoi@adb.org