ICMA’s Sustainability-Linked Bond Principles align with ENEL issuance

In late 2019 ENEL, the Italian energy company issued a series of innovative sustainability-linked bonds, under its EMTN programme, with the rate of interest dependent upon ENEL’s performance against predefined sustainable development goals. In a departure from the established “use of proceeds” model for green, social and sustainable bonds, the proceeds of these bonds are for general corporate purposes, and not restricted to “green” or “sustainable” purposes. This marked the first issuance of its kind in the European bond market, with a large syndicate of banks advised by Linklaters (click here for further information).
 
Shortly thereafter, the Executive Committee of the ICMA Green and Social Bond Principles established a working group to take stock of this development and to consider proposing market guidance aligned with this innovative approach, and on 9 June 2020, the Green and Social Bond Principles released the Sustainability-Linked Bond Principles (the “SLBP”) were released.
 
See our alert for further detail on ICMA’s new principles and the anatomy of a sustainability-linked bond.