Financing projects that promote sustainability
The 17 UN Sustainable Development Goals (SDGs) and 169 subgoals provide a blueprint for peace, prosperity and well-being, for people and our planet. We are committed to helping achieve the SDGs. In fact, our future core businesses themselves – energy networks and customer solutions – are our biggest contribution. They in particular promote affordable and clean energy (goal 7), sustainable cities and communities (goal 11) and the fight against climate change (goal 13). In order to achieve the SDGs, the financial system will have to shift toward rewarding sustainable businesses.
Bonds for a better tomorrow
A bond can be a force that unites people. Or an interest-bearing certificate promising to repay borrowed money on a certain date. We have established a Green Bond Framework and strive to add Green Bonds to our funding mix going forward, to achieve both: we want to unite with like-minded investors who want to support projects that have demonstrable climate benefits and that help achieve the SDGs; and of course we will pay these investors back. We intend to issue Green Bonds to finance and/or refinance renewable energy, energy efficiency and clean transportation projects that fit with our core businesses and sustainability strategy.
Our standards for issuing the bonds are guided by the International Capital Market Association’s Green Bond Principles (2018 edition). Our Green Bond committee – which is composed of representatives from Sustainability, Energy Networks, Customer Solutions and Group Finance and, on an ad hoc basis, experts on the subjects under discussion – decides which projects are eligible and allocates funds to them.
We evaluate and select projects for financing and/or refinancing with Green Bond proceeds using stringent eligibility criteria that reflect our strategic sustainability objectives as well as applicable national, European, and global environmental and social standards and regulations.1 This ensures that any potential negative environmental and social impacts are carefully considered and mitigated or, ideally, avoided in the first place. We will provide aggregated disclosures of the allocation of the net proceeds to eligible green projects for all Green Bonds and other potential green financing vehicles outstanding along with our sustainability reporting from 2020 onward. Where feasible, we intend to report on the environmental impacts of the projects funded with the Green Bond proceeds.
Syndicated revolving credit facility with ESG feature
E.ON continues to put its sustainability strategy into action: In addition to issuing Green Bonds, E.ON has implemented an ESG feature in its € 3.5 billion syndicated revolving credit facility. The facility has a maturity of 5 years (with two options to extend the facility, in each case for one year) and is made available by 21 banks which constitute E.ON’s core group of banks.
By linking the credit margin to the performance of certain ESG ratings, E.ON sets itself financial incentives to pursue a sustainable corporate strategy. These ESG ratings are determined by three well-established agencies: ISS ESG, MSCI ESG Research, and Sustainalytics.
How our businesses contribute
Find out more about how our energy networks and customer solutions businesses propel the transition to a clean and sustainable energy world: