BNP Paribas Launches Pioneering CSR Investment Solution: First Equity Index-Linked World Bank Green Bond
18.09.2014 | Group, Press release
BNP Paribas has launched the first World Bank Green Bond linked to an equity index comprised entirely of companies selected on the basis of their corporate sustainability ratings. The product has been designed by the capital markets teams at BNP Paribas Corporate and Investment Banking in collaboration with the World Bank, and the first issue was purchased by BNP Paribas Cardif, the group’s insurance division.
BNP Paribas and the World Bank worked together to satisfy growing investor interest in supporting both companies with good Corporate Social Responsibility (CSR) track records and specific climate-friendly projects. Their collaborative effort led to the creation of a unique sustainable Equity Index-Linked investment product, with capital insured through the World Bank Green Bonds, plus exposure to the performance of the Ethical Europe Equity Index.
The World Bank Green Bonds help raise funds for projects seeking to mitigate climate change and help those affected adapt to it, while the Ethical Europe Equity Index, calculated by Solactive, selects its companies through a strict Sustainable Responsible Investing (SRI) filtering approach. The stocks in the index are selected from corporates analysed by Vigeo – an established and globally-recognised Environmental, Social and Governance (ESG) rating agency. The index is based on ESG performance. Only best-in-class stocks not involved in disputable activities are selected and certified by Forum ETHIBEL, an independent Belgian ethical expert, which guarantees the strict respect of defined ethical principles. Solactive chooses its final 30 stocks using strict financial criteria: liquidity, dividend yield and volatility.
BNP Paribas Cardif purchased this first sustainable Equity Index-Linked Green Bond issued by the World Bank, a EUR50m note with a 10-year maturity. This innovative structure is perfectly in line with BNP Paribas Cardif’s CSR strategy and part of its commitment to drive progress in socially responsible investment solutions for its clients.
Doris Herrera-Pol, Director and Head of Global Capital Markets at the World Bank, said: “This is the first Equity Index-linked World Bank Green Bond. It is a further step in the development of the green bond market and expands the investor base to investors seeking to benefit from the financial performance of a sustainable equity index, while supporting climate-focused activities in World Bank member countries. We were very pleased to have worked with BNP Paribas Cardif and the capital markets teams at BNP Paribas Corporate and Investment Banking to design this structure”.
Olivier Héreil, Chief Investment Officer, BNP Paribas Cardif, comments: “This is our first purchase of an innovative sustainable investment product. With a strong commitment to Corporate Social Responsibility, BNP Paribas Cardif is honoured to be the first investor for this structure which benefits from the performance of the index for our clients and, at the same time, supports the World Bank’s climate mitigation endeavour”.
Renaud Meary, Global Head of Structured Equity, BNP Paribas Corporate and Investment Banking, says: “This investment solution is a landmark step in what is set to become a rapidly growing Sustainable and Responsible Investment market. This combines BNP Paribas’ traditional strengths in structured products, debt capital markets, and sustainable finance. It reaffirms our dedication to helping clients achieve their objectives and adapt to cultural shifts.”
About BNP Paribas
BNP Paribas has a presence in 75 countries with more than 180,000 employees, including more than 140,000 in Europe. It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate & Investment Banking. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail banking model across Mediterranean basin countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Investment Banking and Investment Solutions activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia-Pacific.
About BNP Paribas Cardif
BNP Paribas Cardif integrates the life and property & casualty insurance subsidiaries of BNP Paribas. It develops savings and protection products and services which are distributed via a wide range of channels. Present in 37 countries with a diversified geographic footprint, BNP Paribas Cardif has strong positions in Europe, Latin America and Asia. In 2013, it had gross written premiums of 25.3 billion euros, with 58% of gross written premiums generated outside France. BNP Paribas Cardif counts nearly 10,000 employees , of whom 77% work outside France. With a strong commitment to exemplary Corporate Social Responsibility, BNP Paribas Cardif develops responsible products and services, supports diversity within the company, deploys an internal environmental policy and supports economic and financial education.
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 188 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank has two main goals: to end extreme poverty and promote shared prosperity. It seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines and by coordinating responses to regional and global challenges. It has been issuing sustainable development bonds in the international capital markets for over 60 years to fund its activities that achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website. For more information about World Bank green bonds, see the website.
Please visit www.solactive.com.
Founded in 2002 and led by Nicole Notat, Vigeo is the leading European expert in evaluating corporate social responsibility through six domains: environment, human rights, human resources, community involvement, business behavior, and corporate governance.
Vigeo offers two types of services through two business brands:
• Vigeo rating – the way to responsible investment – offers a broad range of products and services to investors and asset managers who seek a sustainable and responsible performance of their investments on more than 2 500 issuers: companies, regions and states;
• Vigeo enterprise – the way to responsible management – works directly with organizations of all sizes from both public and private sectors, conducts global CSR audits and benchmarks, supports teams and integrates CSR/SRI criteria into business functions and strategic operations.
Vigeo Rating's research meets high quality standards and has been externally certified to the Arista standard since 2009, a quality standard for SRI research.
Vigeo is present in Paris, Casablanca, Brussels, Milan, London, Tokyo and Santiago of Chile and has more than 120 employees.
About Forum Ethibel
Please visit www.forumethibel.org.
This press release is directed at professional clients only.This information contained herein is not intended to constitute, and should not be relied on for, legal, tax, accounting, regulatory or financial advice. In relation to the matters discussed herein we are not acting as your fiduciary or as a financial, commodity or investment adviser and liability is disclaimed accordingly. We accept no liability for any direct or consequential losses arising from any action taken in connection with or reliance on the information contained herein. Investors should be aware that these investments can go up or down in value and that investors’ capital may be at risk. Past performance is no guide to future returns.BNP Paribas London Branch (registered office 10 Harewood Avenue, London NW1 6AA; tel: [44 20] 7595 2000; fax: [44 20] 7595 2555) is authorised and supervised by the Autorité de Contrôle Prudentiel and authorised and subject to limited regulation by the Financial Services Authority. Details about the extent of our authorisation and regulation by the Financial Services Authority are available on request. BNP Paribas London Branch is registered in England and Wales under no. FC13447.Neither the Issuer nor the Guarantor shall have any liability for any act or failure to act by an Index Sponsor in connection with the calculation, adjustment or maintenance of the Index. Except as disclosed prior to the Issue Date, neither the Issuer nor the Guarantor has any affiliation with or control over the Index or Index Sponsor or any control over the computation, composition or dissemination of the Index. Although the Calculation Agent will obtain information concerning the Index from publicly available sources it believes reliable, it will not independently verify this information. Accordingly, no representation, warranty or undertaking (express or implied) is made and no responsibility is accepted by the Issuer or the Guarantor as to the accuracy, completeness and timeliness of information concerning the Index.