BNP Paribas issued Australia's first green bond linked to the performance of an index tracking companies tipped to benefit from the country's transition into a low-carbon economy, aiming to bridge a gap in sustainable investment products.
FILE PHOTO: The logo of French bank BNP Paribas is pictured during the Viva Tech start-up and technology summit in Paris, France, May 25, 2018. REUTERS/Charles Platiau
On Friday, BNP sold A$140 million of 8-year bonds that pay a fixed coupon plus a potential return tied to the performance of a “forward-looking” climate transition index, the first of its kind, investors said. Developed by the French bank in collaboration with Monash University, ClimateWorks Australia and the ESG arm of corporate governance consultant Institutional Shareholder Services, the index uses scenario weighting and company data to chose those likely to do well from the transition to a decarbonised world.
Investors will receive an undisclosed fixed coupon linked to BNP Paribas’ green bond program, plus a potential “green premium” stemming from the performance of the new Australian index. BNP will use the proceeds to invest in certified green projects and hedge the exposure to the index.
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