NatWest has won four titles in the 2022 Environmental Finance Bond Awards, which celebrate the leading green, social, sustainability and sustainability-linked (GSSS) debt transactions of the previous year.
The awards won reflect both the bank’s impactful role as an issuer and intermediary. NatWest Group was awarded “Green Bond of the Year for Financial Institutions”, “Social Bond of the Year for Financial Institutions”, and “Green Bond use of proceeds Innovation of the Year”, while NatWest Markets won the “Lead manager of the Year, social bonds - local authority/municipality” award.
NatWest Group provides 'important standard' on additionality for its sustainable bond issuances
Deciding upon the “Green Bond of the Year for financial institutions”, “Social Bond of the Year for Financial Institutions”, and “Green Bond use of proceeds Innovation of the Year”, the panel praised NatWest Group for providing an “important standard” on additionality for its sustainable bond issuances in 2021. These included a €1 billion social bond in February to finance affordable housing loans to housing associations, and a £600 million green bond in November to support NatWest’s newly launched green residential mortgage lending programme.
The judges welcomed the incorporation of clear limits on how much of the bonds’ proceeds could be used to refinance existing lending, looking to address rising concern from investors that sustainable bonds demonstrate clear “additionality”. The social bond committed at least 25% of proceeds to finance future loans, with the green bond committed to using at least 50% of proceeds for new loans.
The panel also praised NatWest Group for publishing an initial allocation report at the point of issuance, rather than waiting the usual 12 months to publish that information in the first annual post-issuance report; and in doing so, providing additional transparency for the investors.
Furthermore, the judges recognised the “strong alignment” of the use of proceeds for both bonds with NatWest Group’s overall business strategy. The green bond will support the roll-out of cheaper ‘green mortgages’ for residential properties with an Energy Performance Certificate (EPC) score of ‘A’ or ‘B’ as it looks to achieve a 50% EPC ‘C’ or higher mortgage book by 2030. The social bond, meanwhile, was the first UK issuance by a financial institution focused on housing association funding, building on the Group’s commitment to funding for the sector.
NatWest praised for leading role in supporting regional governments achieve a just transition
The recognition as “Lead manager of the Year, social bonds – local authority/municipality” was based on NatWest’s role in helping regional governments access funding to ensure a ‘just transition’, recognising NatWest’s joint structuring and bookrunner role for the debut €500 million ($550 million) social bond issued by the Communauté Française de Belgique (CFB) and its support for the €1.5 billion BNG Bank social bond in November 2021.
The panel also highlighted NatWest’s successful mandate for the €500 million MuniFin social bond tap in October last year, which was more than three-times oversubscribed by investors, with 75% of the total allocated to sustainable investors – the highest ESG investor allocation achieved by MuniFin for its sustainable bond programme.
Proud to be recognised as a sustainable, purpose-led bank
Scott Forrest, Head of Treasury DCM at NatWest Group, added: “Winning these three prestigious sustainable finance awards for our social bond and green bond, both issued in 2021, is a fantastic achievement. We’re proud that the panel has recognised our commitment to act as a sustainable, purpose-led bank that champions the communities we serve and helps them to thrive, as well as supports them on their journey to net zero.”
Commenting on the awards, Caroline Haas, Head of Climate and ESG Capital Markets at NatWest, said: “We’re absolutely thrilled that the Environmental Finance panel has yet again recognised our leading role in the sustainable finance market as well as our dedication to make our customers’ sustainable finance transactions a success for them. Given the importance of regional governments and municipalities on the transition to a greener and more just economy and society, we are committed to support municipality-focused issuers on their sustainability journey, reflecting NatWest’s purpose-led strategy, which puts sustainability at the heart of our activities.”