Schneider Electric successfully launches its first climate bond

Schneider Electric breaks new ground with €200M climate bond dedicated to finance low carbon R&D programs and by targeting investors committed on climate change.

Schneider Electric, the global specialist in energy management and automation, successfully launched a climate bond in October 2015, raising 200 million euros with a 10-year maturity and a coupon of 1.841% in partnership with AXA Investment Managers (AXA IM), Mirova and Neuflize OBC Investissements.

The objective of this bond issue is to finance Schneider Electric’s R&D programs dedicated to technologies enabling the Group’s customers to achieve superior CO2 savings. This is the first corporate climate bond dedicated to finance low-carbon innovation programs.

Jean-Pascal Tricoire (pictured), Chairman and CEO of Schneider Electric, said: “This unprecedented bond issue, both in terms of targets and purpose, strengthens our strategy to offer innovative technologies to help our customers to reduce their CO2 emissions. We strongly believe that a significant number of climate change challenges can be resolved with the adoption of new technologies, which will also enable processes and business model changes.”

The fight against climate change through development of solutions for energy efficiency and CO2 reduction has been at the heart of Schneider Electric’s activities and strategy for years. Schneider Electric helps its customers to reduce their CO2 emissions, with solutions supporting their business objectives. Furthermore, by end of 2017, 100% of solutions offered by Schneider Electric will come with a comprehensive and transparent estimate of their CO2 impacts & gains.

Technologies covered under this climate bond fall within areas of expertise where Schneider Electric boasts a high degree of experience and skills, enabling a robust assessment of expected CO2 savings on customers’ end. The selected R&D programs aim at developing new technologies adding value in one or more of the following dimensions:

– Energy efficiency;

– Low-CO2 energy production through connection of renewable energy solutions to grid;

– Low-greenhouse gases content;

– Low resource intensity.

Schneider Electric committed to communicate and report on fund allocation and ex-ante estimates of the anticipated climate benefits.  A Vigeo’s second party opinion has been issued on the alignment of the bond with the Green Bond Principles and on the sustainability of the transaction. A yearly auditor’s certificate on the fund allocations and an external verification of the indicators of the Planet & Society Barometer will also be provided.

This club deal, which was only targeting investors who are signatories to the Green Bond Principles or to the Global Investor Statement on Climate Change, was jointly managed by Crédit Agricole CIB and Natixis.

Jean-Pascal Tricoire said: “This climate bond combines R&D, green technology and responsible investment. On the eve of the Climate Change Conference in Paris (COP21), we trust this is a strong and positive signal from an industrial player and its investing partners.”

John Porter, Global Head of Fixed Income at AXA Investment Managers, commented: “We sourced and structured this investment on behalf of AXA Group as part of their continued commitment to tripling their green investment footprint to reach over EUR 3 billion by 2020.

“The knowledge and experience of AXA IM’s responsible investment team ensures that we only invest in quality green bond issuers as not all green bonds are equal. Furthermore, the bespoke platform built for AXA Group by our fixed income and structured finance teams has made a club deal of this size (EUR 160 million) in the green bond market possible.”

Philippe Zaouati, Chief Executive Officer at Mirova, commented: “For Mirova, a leading player in the Green Bond market, Schneider Electric’s bond issue, financing its energy efficiency research programme, meets many energy transition challenges.”

Xavier Chapon, Head of Fixed Income at Neuflize OBC Investissements, commented: “We manage sustainable funds and invest in Green Bonds. The Schneider Electric’s climate bond issue meets all our sustainable investment criteria and the sustainability policy of the issuer is clearly defined and robust.”