Chapter News

EIB issues first Sustainability Awareness Bond

  • EUR 500 m bonds demonstrates commitment to UN Sustainable Development Goals
  • New bonds expand benefits of impact reporting and transparency beyond climate
  • High-impact water projects to benefit from first sustainable bonds

The European Investment Bank today issued its first Sustainability Awareness Bond. The EUR 500 million transaction represents the first EIB funding intended to directly support sustainable finance and builds on the EIB’s pioneering role unlocking investment through green bonds.

“The launch of the EIB’s new Sustainability Awareness Bonds today demonstrates the EU Bank’s firm commitment to unlocking finance for high impact projects in sustainable sectors beyond climate. Sustainability Awareness Bonds build on the global success of green bonds, ensuring the confidence of socially responsible investors through rigorous transparency and market standards. We have selected the water sector as a starting point, as it is a mature sector, with well-defined impact indicators. We look forward to expanding the scope of the Sustainability Awareness Bonds in the coming months to cover health and education, which are key sectors where we can improve people’s daily life around the world,” said Werner Hoyer, President of the European Investment Bank.

With this new product, the Bank extends its established allocation and reporting practice to enhance capital market transparency and accountability in further areas of environmental and social sustainability. The new Sustainability Awareness Bonds complement Climate Awareness Bonds (CABs), the EIB’s established green bonds that support renewable energy and energy efficiency projects worldwide.

Harnessing financial support from global investors and capital markets is essential to achieving Sustainable Development Goals (SDGs) and improving people’s daily lives. The United Nations estimates that USD 6 trillion of new annual investment is needed to successfully tackle SDGs and the new Sustainability Awareness Bonds will strengthen investor support for transformational sustainable investment.

Initial focus on water projects and expected expansion to other sectors

The European Investment Bank is one of the largest financiers of water projects worldwide and proceeds from the first Sustainability Awareness Bonds will be allocated to water investment that supports sustainability objectives as defined by EU legislation.

These sectors include:

  • sustainable use and protection of water and marine resources;
  • transition to a circular economy, waste prevention and recycling;
  • pollution prevention and control;
  • protection of healthy ecosystems.

Initially, Sustainability Awareness Bonds will focus on investment in water supply, sanitation and flood protection. They are expected to expand to other sectors such as health and education once detailed reporting frameworks are in place.

Focus on high-impact and transformational investment

Sustainability Awareness Bonds will focus on high-impact investments selected on the basis of EIB’s sector and impact definitions, which will enable detailed reporting and transparency. This approach will also contribute to ongoing taxonomy discussions of the European Commission’s Technical Expert Group on Sustainable Finance.

Supporting sustainable investment across Europe and around the world

The EIB has in-depth technical and financial experience financing projects worldwide. Sustainability Awareness Bonds will support projects both across the European Union and in emerging and developing economies.

Reflecting the high-impact focus and specific sustainable investment challenges it is expected that the new bonds will include stronger support for projects outside the European Union than overall EIB financing activity.

Building on capital market best practice

In consultation with leading socially responsible investors and industry groups, Sustainability Awareness Bonds are expected to contribute to enhancing best practice concerning the use of proceeds, project evaluation and selection, reporting and verification.

Reflecting investor feedback the new Sustainability Awareness Bonds are based on the EIB’s commitment to a rigorous framework aligned with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines.

Building on EIB’s pioneer role in the green bond market

Sustainability Awareness Bonds build on the success of EIB’s Climate Awareness Bonds (CAB’s). The EIB pioneered the green bond market in 2007 has since issued more than EUR 23 billion equivalent of CABs, and continues to be one of the largest issuers of green bonds.

Compliments of the European Investment Bank