EACT SUMMIT 18

4 THE EACT SUMMIT BRUSSELS 2018 a business, we have to do something. What’s more, investors are increasingly demanding the companies take action in the green and sustainability spheres. In France, for example, investors are now having to do stress-testing in terms of the impact of their investments on the climate. We're also looking at a similar voluntary code within the UK, perhaps with the Bank of England-led Task Force on Climate-related Financial Disclosures. So, personally, I don't think it’s about greenwashing; it's about getting everybody to focus on doing the right thing. Green bonds are one way of using finance tomake a difference. Gerard Tuinenburg, Unilever: Under USLP, every capital expenditure must be in line with set criteria. Our green sustainability bonds also have to adhere to these strict criteria, which involve there being a genuine underlying reason for the issuance. That said, we also wanted to be the first real corporate to issue in this market to drive the market and to encourage other corporates to do the same. . Nicholas Pfaff, ICMA: When the EIB issued a climate bond in 2007, it became one of the market’s founding transactions. How is the EIB continuing itswork in this area? JuanMagaña, European Investment Bank: Since then, we have issued over €20m in green bonds. We are a policy-driven organisation and climate change is a fundamental cause for us. Fromour own treasury perspective, we have green bonds in a programme that we absolutely expect to continue. As a bank, we are committed to at least 25% of all project lending, both for mitigation of and adaptation to climate change. In 2017, that amounted to nearly €18bn, of which in excess of €1bn was outside the EU. We now have a full range of instruments, including finance for renewable energy projects and for projects in high risk areas that otherwise might not be funded. Nicholas Pfaff, ICMA: What are the downsides – if any – of issuing green and sustainable bonds? Jane Pilcher, AnglianWater Group: The painful bit for me was writing the green bond framework. I honestly did not knowwhere to start. One of the green bond opinion providers offered to write it for me but they just wanted tomake it easier for themselves to audit. In the end, we did it ourselves; one bank kindly offered to come up with a first draft, and then it took on life of its own. I was amazed howmuch support I got Jane Pilcher Green and social bond principles According to the ICMA, the common feature of green bonds, social bonds and sustainability bonds is their predetermined use of proceeds and voluntary alignment with the core components of the green and social bond principles (GBP and SBP). The GBP and SBP are based on four pillars and external review recommendations: USEOF PROCEEDS MANAGEMENT OF PROCEEDS REPORTING PROCESS FORPROJECT EVALUATIONAND SELECTION Source: ICMA Gerard Tuinenburg