Still, the Sterling market is turning green, and over the past years has seen a number of historical green transactions: In 2014, Unilever opened up the Sterling Green Bonds market with a 4 year, £250m issuance to finance green projects for its manufacturing plants, while in August 2017 Anglian Water made history by becoming the UK’s first public utility to launch a Sterling Green Bond. And, in 2018, the International Finance Corporation, a member of the World Bank Group and one of the world’s largest financiers of climate-smart projects in developing countries, issued its debut Sterling Green Bond.
Headline making green issuances continued in the fourth quarter of 2019, which brought a peak in Sterling-denominated Green Bonds in the Sovereign, Supranational and Agency (SSA) domain: the European Investment Bank issued the largest Sterling Green Bond with a volume of £800 million, topping German state-owned development bank KfW’s £650 million Green Bond from July 2019. In the same year, Scottish energy company SSE became the largest UK corporate Green Bonds issuer with their debut £350 million Green Bond.
In 2020, the Sterling market as well as British corporates celebrated further green ‘firsts’:
- Northern Powergrid’s ultra-long £300 million 42 years debut Green Bond. With this transaction the company became the first electricity distribution network operator (DNO) in the UK to issue green debt.
- Cadent Gas’ Euro 500 million 12 years Transition Bond based on its Transition Bond Framework, the first UK corporate to publish such a framework,
- National Grid’s debut Green Bond in the Euro-market raising EUR500 million, followed by the UK company’s first Green Bonds in the US a few months later, and
- Tritax’s debut Sterling Green Bond, the first from a UK Real Estate Investment Trust (REIT).
2021 has already seen significant activity, with ‘first adopters’ now following the green fixed income pioneers in the Sterling market: Whitbread, the largest hotel operator in the UK, launched a dual tranche Sterling Green Bond in February, while Workspace Group, the UK office space company, opted for a Sterling Green Bond as its debut in the fixed income market, sending an important signal that the real estate sector, responsible for around 40% of the global carbon footprint, is increasingly committing to sustainability.
Furthermore, Dutch bank ING tapped into the Sterling market in February, offering much wanted green supply to UK investors with it an £800 million 6-year Green Senior HoldCo (Holding Company) Green Bond.