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.”
Are the UK Governments Plans for the Energy Sector Smart?
The revolution in the energy sector marches on, wind turbines and solar panels are harnessing more renewable energy than ever before – so where is it all leading?
The UK government have recently announced plans to modernise the way we produce, store and use electricity. And, if realised, the plans could be just the thing to bring the energy sector in line with 21st century technology and ideologies.
Central to the plans is an initiative that will see smart meters installed in homes and businesses the length and breadth of the country – and their aim? To create an environment where electricity can be managed more efficiently.
The news has prompted some speculation about how energy suppliers will react and many are predicting a price war. This could benefit consumers of electricity and investors, many of whom may be looking to make a profit by trading energy company shares online using platforms such as Oanda – but the potential for good news doesn’t end there.
Introducing New Technology
The plan, titled Smart Systems and Flexibility is being rolled out in the hope that it will have a positive impact in three core areas.
- To offer consumers greater control by making smart meters available for all homes and businesses by 2020. Energy users will be able to monitor, control and record the amount of energy they use.
- Incentivise energy suppliers to change the manner in which they buy electricity, to offer more smart tariffs and more off-peak periods for energy consumption.
- Introduce new standards for electrical appliances – it is hoped that the new wave of appliances will recognise when electricity is at its cheapest and at its most expensive and respond accordingly.
How the Plans Will Affect Solar Energy
Around 7 million houses in the UK have solar panels and the government say that their plan will benefit them as they will be able to store electricity on batteries. The stored energy can then be used by the household and excess energy can be exported to the national grid – in this instance lower tariffs or even payment for the excess energy will bring down annual costs significantly.
The rate of return on energy exported to the national grid is currently between 6% and 10%, but there are many variables to take into account, such as, the cost of battery storage and light levels. Still, those with state-of-the-art solar electricity systems could end up with an annual profit after selling their excess energy.
The Internet of Things
Much of what the plans set out to achieve are linked to the now ubiquitous “internet of things” – where, for example, appliances and heating systems are connected to the internet in order to make them function more smartly.
Companies like Hive have already made great inroads into this type of technology, but the road that the government plans are heading down, will, potentially, go much further -blockchain technology looms and has already proved to be a game changer in the world of currency.
It has already been suggested that the peer to peer selling of energy and exporting it to the national grid may eventually be done using blockchain technology.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Don and Alex Tapscott, Blockchain Revolution (2016)
The upshot of the government’s plans for the revolution of the energy sector, is that technology will play an indelible role in making it more efficient, more flexible and ultimately more sustainable.
4 Case Studies on the Benefits of Solar Energy
Demand for solar energy is growing at a surprising rate. New figures from SolarPower Europe show that solar energy production has risen 50% since the summer of 2016.
However, many people are still skeptical of the benefits of solar energy.Does it actually make a significant reduction in our carbon footprint? Is it actually cost-effective for the company over the long-run?
A number of case studies have been conducted, which indicate solar energy can be enormously beneficial. Here are some of the most compelling studies on the subject.
1. Boulder Nissan
When you think of companies that leverage solar power, car dealerships probably aren’t the first ones that come to mind. However, Boulder Nissan is highly committed to promoting green energy. They worked with Independent Power Systems to setup a number of solar cells. Here were the results:
- Boulder Nissan has reduced coal generated electricity by 65%.
- They are on track to run on 100% renewable energy within the next 13 years.
- Boulder Nissan reduced CO2 emissions by 416,000 lbs. within the first year after installing their solar panels.
This is one of the most impressive solar energy case studies a small business has published in recent years. It shows that even small companies in rural communities can make a major difference by adapting solar energy.
2. Valley Electric Association
In 2015, the Valley Electric Association (VEA) created an 80-acre solar garden. Before retiring from the legislature, U.S. Senate Minority Leader Harry Reid praised the new project as a way to make the state more energy dependent and reduce our carbon footprint.
“This facility will provide its customers with the opportunity to purchase 100 percent of their electricity from clean energy produced in Nevada,” Reid told reporters with the Pahrump Valley Times. “That’s a step forward for the Silver State, but it also proves that utilities can work with customers to provide clean renewable energy that they demand.”
The solar energy that VEA produced was drastically higher than anyone would have predicted. SolarWorld estimates that the solar garden created 32,680,000 kwh every year, which was enough to power nearly 4,000 homes.
This was a major undertaking for a purple state, which may inspire their peers throughout the Midwest to develop solar gardens of their own. It will reduce dependency on the electric grid, which is a problem for many remote states in the central part of the country.
3. Las Vegas Casinos
A number of Las Vegas casinos have started investing in solar panels over the last couple of years. The Guardian reports that many of these casinos have cut costs considerably. Some of them are even selling the energy back to the grid.
“It’s no accident that we put the array on top of a conference center. This is good business for us,” Cindy Ortega, chief sustainability officer at MGM Resorts told Guardian reporters. “We are looking at leaving the power system, and one of the reasons for that is we can procure more renewable energy on the open market.”
There have been many benefits for casinos using solar energy. They are some of the most energy-intensive institutions in the world, so this has helped them become much more cost-effective. It also helps minimize disruptions to their customers learning online keno strategies in the event of any problems with the electric grid.
4. Boston College
Boston College has been committed to many green initiatives over the years. A group of researchers experimented with solar cells on different parts of the campus to see where they could produce the most electricity. They discovered that the best locationwas at St. Clement’sHall. The solar cells there dramatically. It would also reduce CO2 emissions by 521,702 lbs. a year and be enough to save 10,869 trees.
Boston College is exploring new ways to expand their usage of solar cells. They may be able to invest in more effective solar panels that can generate far more solar energy.
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