In an unprecedented move, the European Investment Bank has priced a SEK 1 billion digital Climate Awareness Bond (CAB), marking a significant milestone in sustainable finance. This groundbreaking bond issuance utilizes the so|bond model, a sustainable and open digital bond platform developed by Crédit Agricole CIB and SEB. EIB aims to minimize the environmental impact of its IT infrastructure while promoting transparency and efficiency in the primary market processes by leveraging blockchain technology.
The digital Climate Awareness Bond has a maturity of 2 years and bears a fixed rate coupon of 3.638%. The issuance showcases EIB’s commitment to green financing and addressing climate change challenges. By issuing the bond in Swedish Krona, EIB further diversifies its currency exposures and reaches a wider investor base.
Introducing the Proof of Climate awaReness (PoCR) Protocol
At the heart of the so|bond platform lies the innovative Proof of Climate awaReness (PoCR) protocol. This blockchain validation logic ensures that the energy consumption of the blockchain system remains comparable to non-blockchain systems, addressing concerns about the environmental impact of distributed ledger technology. The PoCR protocol incentivizes participating nodes to continuously improve the environmental footprint of their infrastructures.
Under the PoCR protocol, each node’s environmental impact is evaluated using the Life Cycle Assessment ISO standard. Nodes with a lower environmental footprint receive larger rewards, encouraging a race towards greener infrastructure. The PoCR protocol aligns financial incentives with environmental goals, setting a new standard for sustainable blockchain solutions by rewarding sustainability efforts.
The so|bond platform is operated by Crédit Agricole CIB, CACEIS, and SEB, with Crédit Agricole CIB serving as the central account keeper. This collaborative effort ensures the safekeeping of the digital bond while promoting efficiency and transparency in the issuance process. CACEIS and SEB, acting as custodians, provide secure storage and management of the digital Climate Awareness Bond on behalf of investing clients.
The successful issuance of the digital Climate Awareness Bond involved legal guidance from Clifford Chance, providing expert advice to the European Investment Bank, and Linklaters, advising the joint lead managers. This comprehensive legal support ensures compliance with regulations and reinforces the commitment to responsible financial practices.
Visionary Statements and Commitment to Sustainability
EIB Vice-President Ricardo Mourinho Felix expressed immense pride in this groundbreaking achievement, emphasizing the institution’s role as a leader in sustainable finance and technological innovation. He highlighted the bond’s issuance in a blockchain format, designed to minimize the environmental footprint of the IT infrastructure. The combination of blockchain technology and the institution’s unwavering commitment to environmental stewardship paves the way for a greener and more sustainable future.
Pierre Gay, Global Head of Crédit Agricole CIB’s Global Markets Division, lauded the collaboration between Crédit Agricole CIB and EIB, highlighting their shared commitment to exploring new technologies for sustainable primary market processes. The so|bond model, coupled with the innovative Proof of Climate awaReness protocol, aligns with EIB’s philosophy and promotes sustainable solutions that address inefficiencies while minimizing environmental impact.
Tanguy Claquin, Global Head of Sustainability at Crédit Agricole CIB, emphasized the significance of this achievement, stating that the digital Climate Awareness Bond is the first European digital green bond, addressing concerns associated with the perceived environmental impact of Digital Ledger Technology. This innovative transaction combines new technology with EIB’s Climate Awareness Bond program, further advancing sustainable finance initiatives.
Collaborative Efforts in Sustainable Finance
Anna Sjulander, Global Head of SSA DCM at SEB, expressed delight in assisting EIB in the delivery of its first digital Green Bond. The collaboration between EIB and SEB showcases a solution that combines innovation and climate-smart strategies. The so|bond model promotes industry collaboration and introduces transparency of environmental footprints through the Proof of Climate awaReness protocol. This technological development fosters efficiency gains and advances the sustainable finance landscape.
The European Investment Bank’s issuance of the digital Climate Awareness Bond denominated in Swedish Krona sets a remarkable precedent for sustainable finance and technological innovation. EIB demonstrates its commitment to environmental stewardship and driving positive change within the financial industry by utilizing the so|bond platform and integrating the Proof of Climate awaReness protocol.
This historic move paves the way for a greener and more sustainable future, emphasizing collaboration, transparency, and efficiency in sustainable finance practices.