World first: SNCF’s new Green Commercial Paper programme meets Green Bond Principles
SNCF SA, rated A-1+ / P-1 / F1+ (S&P / Moody’s / Fitch)1, successfully launched the world’s first ever green short-term debt instruments on 19 October 2021 under its Euro Commercial Paper (ECP) programme. Totalling €50m, these three-month debt instruments are designed to finance sustainable investments made by SNCF Group under its Green Bond Framework.
Mirova is a Natixis Investment Managers affiliate dedicated to sustainable investment. A pioneer in green bonds, the company worked with SNCF to develop the product and has subscribed to this ground-breaking global issue.
SNCF Group plans to use the funds from this new debt instrument to finance sustainable investments and operations contributing to its energy transition, including recycling, decontamination, power purchase agreements for renewable energies, and more.
SNCF partnered with Mirova, a top-tier investor specialized in green finance, to ensure that this new financing programme met its demanding standards. By subscribing to the full amount of the first issue, Mirova is putting its weight behind the success and growth of this breakthrough format.
Both SNCF Group and Mirova see the programme as a way to expand green finance and promote best practice to step up the pace of investment in the energy transition.
The move is part of SNCF Group’s broader strategic shift to greener financing products. It follows the 2016 launch of its Green Bond programme (the fifth-largest in Europe and sixth-largest worldwide2), and the 2019 signature of a €3.5bn sustainability-linked3 syndicated revolving credit facility.
The new programme meets best practices defined by SNCF, including (i) additionality, which guarantees that green funds raised are used exclusively for new, sustainable investments; (ii) calculation of assets’ environmental impact over their full lifecycle; and (iii) transparency and traceability, with extra-financial performance verified by an external auditor.
Mass transit by rail plays a critical role in reducing greenhouse gas (GHG) emissions. In France, where the transport sector as a whole generates 30% of total GHG emissions, rail accounts for less than 1% of total CO2 emissions but carries 10% of all freight and passengers. A train emits 50 times less CO2 than a car, and 80 times less than a plane4, making it the most efficient, eco-friendly mode of transport by far.
SNCF Group’s parent company SNCF SA has earned non-financial ratings of 74/100 from Vigeo Eiris, taking top spot in the “Transport and Tourism Europe” category, and 77/100 from EcoVadis, putting it among the top 1% of companies evaluated in the sector5.
Mirova is a management company dedicated to sustainable investment. From the start, it pioneered new approaches to deliver solutions that reconcile investment performance with environmental and social impact. Mirova has helped to create and develop new products and asset classes with major benefits for the environment and society, and it was one of the first investors in green bonds. Since 2012, the company has worked with both clients and issuers in green bond markets, and has played an active role in discussions aimed at structuring the market to set the highest standards. Mirova currently manages nearly €3.2bn6 in green and social bonds.
Laurent Trévisani, Deputy CEO Financial Strategy, SNCF Group, said: “This first ever green commercial paper issue demonstrates SNCF Group’s innovative capacity and our commitment to growing the green finance market. We wanted this programme to meet the highest standards, and we are proud to have partnered with Mirova, a demanding and widely recognized player in green finance. We hope it will pave the way for other issuers in the emerging green commercial paper market.”
Rolling out electric-powered mass transit on a large scale is one way to keep global warming below the 2° C target7. It’s been a pleasure to work with SNCF, an issuer committed to fighting climate change. We are particularly proud to have contributed to its green commercial paper programme, designed to help finance increased use of rail as an alternative to cars, which are still largely powered by fossil fuels. At Mirova, we are convinced that greener debt instruments are essential to promoting a low-carbon economy
1 - Ratings that assess company solvency
2 - Source: SNCF, excluding sovereign and bank bonds
3 - Sustainability-linked: linked to achieving targets for sustainable development
4 - Source: SNCF
5 - Source: SNCF
6 - At 30 June 2021
7 - For all its investments, Mirova aims to offers portfolios consistent with holding global warming to under the 2° C target defined in the 2015 Paris Agreement, and it publishes the carbon impact of its investments (excluding social solidarity and natural capital management) as a matter of course. These evaluations are based on a proprietary methodology that may include biases.
The securities mentioned above are shown for illustrative purpose only, and should not be considered as a recommendation or a solicitation to buy or sell.
Mirova, the affiliate of Natixis Investment Managers dedicated to sustainable investing, today announced the launch of its Mirova Environment Acceleration Capital fund1.