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.”