Within the first year of the EUR 500 million Senior Sustainability Bond, being issued in March 2021, Vienna Insurance Group (VIG) was able to allocate 100% of the bond's net proceeds to green and social projects.
Around 50 investors from 12 European countries have subscribed to the bond, which was successfully placed on 18 March 2021; over three quarters of them have an explicit focus on sustainability in their portfolios. "As a society, we collectively face the task of protecting today what will become increasingly important tomorrow: sustainable, renewable energy, living spaces of all kinds, necessary resources and social cohesion. We, as VIG Group, want to achieve a sustainably positive environmental and social impact with our investments. We demonstrate this clearly with our Sustainability Bond: Green projects account for 80% of the net proceeds from the issue, and social projects for 20%", explains CEO Elisabeth Stadler.
Projects in five European countries
The Sustainability Bond Framework was created to ensure that investments are used for green and social assets, and was assessed by Sustainalytics, an independent ESG rating agency. Sustainalytics also reviewed the Allocation and Impact Report. The allocation is balanced between categories and countries. There are ten projects in Austria, four in Spain, three in Poland and one each in Germany and France.
Focus on Green Buildings
The majority of the bond, namely 43% or EUR 215.7 million, was invested in Green Buildings, including three projects for office and residential buildings each in Austria and Poland. Around one fifth of the total was invested in: Renewable Energy (18.8%, EUR 94.1 million) with an offshore wind farm in Germany and two solar plants in Spain, Affordable Housing (18.4%, EUR 92 million) in the form of five projects for non-profit residential buildings in Austria, which comprise a total of 959 residential units, as well as Clean Transportation (17.7%, EUR 88.6 million) with a project for a high-speed train in France and two metro projects in Spain. A further EUR 10.1 million (2%) was allocated for two projects to enable Access to Essential Services such as education and healthcare, including the expansion of a school and investments in health research in Austria.
Striving towards the United Nations sustainability goals
With these investments, VIG Group is specifically paying into four of the United Nations Sustainable Development Goals (SDGs). These form part of its commitment as a member of the UN Global Compact and include: sustainable cities and communities, affordable and clean energy, good health and well-being, and quality education. In the areas Renewable Energy and Green Buildings, the Group has prevented 36,329 tonnes of emissions of CO² equivalents through its investments between 26 March and 31 December 2021.
A detailed report on the allocation and impacts of the Sustainability Bond is available in English on the VIG website via this link.