SNCF SA has successfully launched the world’s first ever green short-term debt instruments under its Euro Commercial Paper (ECP) programme.
Totalling EUR50m, these three-month debt instruments are designed to finance sustainable investments made by SNCF Group under its Green Bond Framework.
Mirova a Natixis Investment Managers affiliate dedicated to sustainable investment and a pioneer in green bonds, worked with SNCF to develop the product and has subscribed to this ground-breaking global issue.
SNCF Group plans to use the funds from this new debt instrument to finance sustainable investments and operations contributing to its energy transition, including recycling, decontamination, power purchase agreements for renewable energies, and more.
SNCF partnered with Mirova, a top-tier investor specialised in green finance, to ensure that this new financing programme met its demanding standards. By subscribing to the full amount of the first issue, Mirova is putting its weight behind the success and growth of this breakthrough format.
Both SNCF Group and Mirova see the programme as a way to expand green finance and promote best practice to step up the pace of investment in the energy transition.
The move is part of SNCF Group’s broader strategic shift to greener financing products. It follows the 2016 launch of its Green Bond programme (the fifth-largest in Europe and sixth-largest worldwide), and the 2019 signature of a EUR3.5 billion sustainability-linked syndicated revolving credit facility.
The new programme meets best practices defined by SNCF, including (i) additionality, which guarantees that green funds raised are used exclusively for new, sustainable investments; (ii) calculation of assets’ environmental impact over their full lifecycle; and (iii) transparency and traceability, with extra-financial performance verified by an external auditor.
Mass transit by rail plays a critical role in reducing greenhouse gas (GHG) emissions. In France, where the transport sector as a whole generates 30 per cent of total GHG emissions, rail accounts for less than 1 per cent of total CO2 emissions but carries 10 per cent of all freight and passengers. A train emits 50 times less CO2 than a car, and 80 times less than a plane, making it the most efficient, eco-friendly mode of transport by far.
SNCF Group’s parent company SNCF SA has earned non-financial ratings of 74/100 from Vigeo Eiris, taking top spot in the “Transport and Tourism Europe” category, and 77/100 from EcoVadis, putting it among the top 1 per cent of companies evaluated in the sector.
Mirova is a management company dedicated to sustainable investment. From the start, it pioneered new approaches to deliver solutions that reconcile investment performance with environmental and social impact. Mirova has helped to create and develop new products and asset classes with major benefits for the environment and society, and it was one of the first investors in green bonds. Since 2012, the company has worked with both clients and issuers in green bond markets, and has played an active role in discussions aimed at structuring the market to set the highest standards. Mirova currently manages nearly EUR3.2 billion in green and social bonds.
Laurent Trévisani, Deputy CEO Financial Strategy, SNCF Group, says: “This first ever green commercial paper issue demonstrates SNCF Group’s innovative capacity and our commitment to growing the green finance market. We wanted this programme to meet the highest standards, and we are proud to have partnered with Mirova, a demanding and widely recognised player in green finance. We hope it will pave the way for other issuers in the emerging green commercial paper market.”
Hervé Guez, CIO Equity & FI at Mirova, says: “Rolling out electric-powered mass transit on a large scale is one way to keep global warming below the 2°C target. It’s been a pleasure to work with SNCF, an issuer committed to fighting climate change. We are particularly proud to have contributed to its green commercial paper programme, designed to help finance increased use of rail as an alternative to cars, which are still largely powered by fossil fuels. At Mirova, we are convinced that greener debt instruments are essential to promoting a low-carbon economy.”
