Daily ESG Briefing: Swedish green bond gets 7-10 year maturity

The latest developments in sustainable finance

The Swedish National Debt Office’s SEK20bn green bond, scheduled for issuance in August, intends to have a maturity within the range of seven to ten years. The bond will be issued in Swedish kronor and under the Debt Office’s programme for Euro Medium Term Notes (EMTN); Barclays, Danske Bank, NatWest Markets, SEB and Swedbank have been appointed as joint lead managers of the issue. SEB also acts as structuring advisor for the bond.

Germany's green energy fund has gone into the red in the first six months of 2020; decreasing from approximately €2bn in available funds to -€1.16bn, according to data by the country's transmission grid operator. This is the first time since 2013 this has occurred to the fund, which finances energy sources and is filled by consumers through a surcharge on their power bill. Earlier this year, analysts flagged the country’s green energy account would fall significantly due to coronavirus.

The EU Green Deal, which aims to make the Union climate-neutral by 2050 and overhaul the economy, is set to allow 20 regional companies capitalise on the changes it makes, according to Goldman Sachs. The bank issued “buy” recommendations on the following: Italian multinational energy company Enel, Germany electric utility RWE, Spain’s Iberdrola, Portugal’s EDP and Spanish subsidiary EDPR, Danish multinational Orsted and Britain’s SSE, Volkswagen, Renault, Alstom, and Vestas.

Four employees from proxy administration and technology firm, Broadridge, and two of its subcontractor's staff, through Dutch staffing agency Randstad Holding, have died due to coronavirus, according to reports. The New-York listed company has criticised outsourcers for not abiding by its standards for health and safety. This follows an investigation by The Intercept and Type Investigations, which claimed employees at TMG Mail Solutions, another subcontractor, were working in crowded cafeterias, and were discouraged from gloves or masks. Broadridge said it was unaware of this and informed TMG to adhere to its own protocol.

French public financial institution, Agence Française de Développement (AFD) is developing ESG-linked loans, with interest rates adjusted in relation to the borrowers’ non-financial objectives; this means pricing can be revised if borrowers exceed ESG targets. AFD has explained the loan period may be 10 to 15 years; the former would have an initial impact assessment after three years, if the results are positive, rates may reduce for the final seven. A pilot was launched at the end of last year in the form of an initial loan of €85m to the Industrial Development Bank of Turkey, to enable it to finance companies working toward gender equality (in careers and wages) and higher rates of female employment.

The Institute of Environmental Management & Assessment (IEMA) and the Institute and Faculty of Actuaries (IFoA) have collaborated to create a new guide on corporate reporting in line with TCFD requirements.

Human-sized Greenpeace signs warn of greenwashing at Luxembourg’s national pension fund headquarters. Outside of Fonds de Compensation (FDC) main entrance, activists put two human-sized yellow signs with the message “Caution – Greenwash.” Despite the pension fund claiming to conduct sustainable and socially responsible investments, it provided more than half a billion euro to oil, gas, and coal companies, for example, Shell, BP, Total, and Chevron during 2019, according to Greenpeace Luxembourg’s analysis of the FDC's annual report. 

The European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and the UK development finance institution CDC Group (CDC) have developed practical guidance for investors and the private sector to better identify, prevent and respond to gender-based violence and harassment (GBVH) risks. The report, which has an emphasis on emerging markets, is released alongside three sector-level briefs covering specific risks and benefits of addressing GBVH in the public transport, manufacturing and construction sectors. The institutions said the guidance is “an important reminder of the role that investors and companies can play in reducing this pernicious and widespread problem”.

US utility Dominion has said that ESG was a key factor in its decision to off-load gas assets and focus on cleaner energy resources, S&P Global pointed out on its website. The firm sold its natural gas transmission and storage business to Berkshire Hathaway Energy in a $9.7bn deal earlier this month. In a call with investors on July 6, Dominion Chairman, President and CEO Thomas Farrell II said: "In reviewing this transaction, in the context of our long-term strategic direction, we weighed several key considerations, including the value to our industry-leading ESG-focused strategy.”

Shareholders, headed by U.K. pension funds, as lead plaintiffs, the Mineworkers’ Pension Scheme and British Coal Staff Superannuation Scheme, have had their $350m settlement in their case against First Solar approved. The Honorable David G. Campbell of the United States District Court approved the settlemt in Smilovits v. First Solar, Inc, in which the plaintiffs, represented by Robbins Geller, claimed the solar panel producer violated the Securities Exchange Act.

Coordinated by sustainability non-profit Ceres and the Interfaith Center on Corporate Responsibility, 50 institutional investors have issued a statement of support for a regulation to reduce air pollution and methane emissions proposed by the Pennsylvania Department of Environmental Protection. 

Countries with carbon prices on average have annual CO2 emission growth rates that are approximately 2% lower than countries without, according to a study by The Conservation. The research and news outlet conducted the largest-ever study into the consequences of emissions from fuel combustion when they attract a charge, by analysing 142 countries across two decades.