Governments, banks and companies consequently issue increasing numbers of green financing products such as green bonds on the financial markets. These contribute to attainment of the Paris climate targets and the United Nations Sustainable Development Goals. A further focus of sustainable finance is sustainability in business. When developing business models, it is necessary to consider social and environmental impacts of business activities and to identify their medium and long-term opportunities and risks. Capital expenditure and investment decisions also additionally take sustainability indicators into account alongside financial performance indicators. In this way, companies help secure the stability and sustainability of financial markets. Business enterprises thus contribute significantly to the financing of global transformation processes.
EnBW sustainable finance activities
In October 2018 we published our EnBW Green Financing Framework. This provides the basis on which we issue green financing instruments such as green bonds on the capital market. The framework is regularly updated and significant changes are openly communicated.
The Green Financing Framework was developed on the basis of the Green Bond Principles. These are voluntary process guidelines that recommend transparency and disclosure in order to facilitate access to green bonds by market participants and ensure the further development of the green bond market. Aspects covered by the Framework include:
- Use of proceeds
- Project evaluation and selection process
- Management of proceeds
- Reporting
Sustainability rating agency ISS ESG has confirmed that the EnBW Green Financing Framework is in accordance with the Green Bond Principles and that we ourselves as a company have above-average sustainability performance.
We have launched the following green bond issues in recent years:
- 24 October 2018: Green Senior Bond for €500 million
- 29 July 2019: Two Green Hybrid Bonds, each for €500 million
All of our Green Bonds have met the criteria for certification by the Climate Bonds Standard Board on behalf of the Climate Bonds Initiative.
In 2019, we committed to reporting annually on the environmental contribution of our Green Bonds and to publish a separate EnBW Green Bond Impact Report alongside our Integrated Annual Report. For the detailed fund allocation, please see the Impact Report at www.enbw.com/impact-report/en.
In June 2017, with the involvement of EnBW CFO Thomas Kusterer, the TCFD developed practical recommendations for disclosure in corporate reporting of climate-related risks and opportunities. EnBW contributes to the Task Force through Thomas Kusterer. Further information on the work of the Task Force is available here.
EnBW CFO Thomas Kusterer was appointed to join the 35-member Technical Expert Group on Sustainable Finance (TEG) in June 2018. The aim is to develop tools and information to enable market players to make effective and efficient decisions. Based on the premise that improved capital allocation, taking into account climate-related financial risks and opportunities, will lead to a more resilient and sustainable global economy and greater financial stability, the TEG compiled recommendations for improved disclosure, a taxonomy of green economic activities and an EU Green Bond Standard. Further information on the work of the TEG is available here.
The Sustainable Finance Committee of the German Federal Government was established in June 2019 at the initiative of the Federal Ministry of Finance (BMF) and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) in close cooperation with the Federal Ministry for Economic Affairs and Energy (BMWi). Comprising 38 representatives of business, civil society, the academic community and various federal ministries, the Committee advises the Federal Government on development and implementation of its Sustainable Finance Strategy and promotes dialogue between relevant stakeholders in order to foster sustainability in the financial sector in Germany. EnBW Group sustainability expert Dr. Lothar Rieth is an active member of the Sustainable Finance Committee. Further information on the work of the Committee is available here.