Launches €5 billion sustainable promissory note program
As part of its strategy is for its financing structure to have an increasingly higher percentage of green and sustainable products, global energy and electricity provider Iberdrola has stated it expects green and sustainable products to account for 63% its debt by 2025. The company stated that 100% of its credit lines and 70% of its hybrid bonds will meet these characteristics in 2021.
The target was provided with the company’s launch of a €5 billion sustainable promissory note program, the largest ever for a Spanish company. The program marks an expansion of Iberdrola’s Euro Commercial Paper (ECP) for issuing short-term promissory notes in the Euromarket, increasing it from €3 billion, and linking the debt to environmentalEnvironmental criteria consider how a company performs as a steward of nature. More, socialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. More and governanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. More factors encompassing five UN Sustainable Development Goals (SDGs).
The ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More goals included in the new sustainable finance instrument include an environmentalEnvironmental criteria consider how a company performs as a steward of nature. More commitment to reduce emissions intensity to 100 g/kwh by 2022, a socialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. More goal to increase the percentage of women in leadership positions to reach 25% in 2022, and governanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. More pledges to apply 11 recommendations from the Task Force on Climate-related Financial Disclosures (TCFD).
Iberdrola’s sustainable finance target comes as the company has recently embarked on a major investment initiative aiming to significantly grow the its renewable energy base. In November, Iberdrola launched a €75 billion investment plan for the 2020-2025 period. The plan includes massive investments over the next five years in renewable energy, with the company anticipating nearly doubling its renewables capacity by 2025.
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