Sustainable Finance


The year behind us was extremely challenging and unforgettable at the very least, however as we enter 2021, we can reflect on its silver linings.

We can look to the new year more responsibly, with increased consideration for environmental and social factors on which we all contribute towards. The signals we saw bring some degree of relief and comfort, as sustainable finance assumes a stable place in government and corporate agendas. In 2020, the total green, social, sustainability and sustainability-linked (GSSS) bond issuances surpassed $530 billion, up 63% compared to 2019. This jump was primarily driven by social bond issuances, surging to $140 billion in 2020, up an astonishing 778% compared to the previous year. – (Environmental Finance)

Albeit the risk of greenwashing is always present, however institutions and market-led initiatives are aware of the challenge posed by self-labelled transactions and marketing-prone deals. In June 2020, the International Capital Market Association (ICMA) published its Sustainability-Linked Bond Principles and in December the Transition Finance Handbook. The new guidance provides issuers with robust indications to set meaningful ESG targets in relation to their sustainability strategy. The Financing Credible Transition white paper published by the Climate Bonds Initiative (CBI) follows the same direction and adds operational suggestions to structure solid strategies.


The European Commission also continues work on its Taxonomy, with the latest November version raising some concerns amongst market players. Hopefully 2021 will bring some stability with attempt to regulate the market and reach an agreement between international institutions. Meanwhile, in line with international market views, the new draft of the Chinese Green Bond Endorsed Project Catalogue now excludes the controversial “clean coal” definition.


The Second Party Opinion team at ISS ESG continues work to uphold standards in the sustainable finance market and, amongst 2020’s Q4 issuances, highlights the SPO provided to LafargeHolcim for its sustainability-linked bond, setting ambitious targets for the reduction of its emissions.


By way of background, ISS Corporate Solutions (ICS) works in collaboration with ISS ESG, the responsible investment arm of Institutional Shareholder Services, as the distributor of SPOs. While the SPOs are sold and distributed by ICS, the analytical work to prepare and issue SPOs is performed by ISS ESG. 

Hydrogen: The World Is Watching

Download ISS ESG’s recent primer on Hydrogen, exploring its contribution to a sustainable future


Author: Marine Durrieu, ESG Consultant, ISS ESG
Contributors:  Mélanie Comble, Viola Lutz, Lena Neuberger; ISS ESG


As external reviewers, ISS ESG has delivered over 240 SPOs according to rigorous and well respected standards. This is a summary of our client successes in Q1 2021 (1 January – 31 March 2021)

ISS ESG conducted the first ever SPO for a Sustainability-Linked bond in the cement sector. In November 2020 LafargeHolcim, one of the largest cement producers globally, priced its inaugural Sustainability-Linked bond, amounting to EUR 850 million with a 0.5% coupon and maturing in 2031. The coupon of this bond is tied with a GHG emissions’ intensity reduction target per tons of cementitious material (including Scope 1), a target certified by the Science Based Target Initiative. ISS ESG concluded that the KPI and associated target selected for this transaction was material and ambitious in comparison to the company’s past performance, sectorial peer group practices and the Paris Climate Goals.

Münchener Hypothekenbank mandated ISS ESG to assist with the reverification of its green bond. The proceeds of the bond will go towards green real estate development, namely commercial green buildings, and private mortgage loans for energy efficient buildings.

ISS ESG concluded that the framework and asset pool was positive according to ICMA’s Green Bond Principles and ISS ESG’s Key Performance Indicators.

The issuer also shows good sustainability performance and received a ‘B’ ISS ESG Corporate Rating which classifies as ‘Prime’ status.

Swiss Prime Site, the Swiss real estate company, successfully placed its first ever green bond in November 2020, with a volume of CHF 300 million. The net proceeds of this fixed-income note will be used to fund projects in the green commercial building sectors.

ISS ESG provided a SPO for this issuance, with a positive opinion on its alignment with the Green Bond Principles, and the sustainability quality of its projects. The issuer received a ‘C-‘ ISS ESG Corporate Rating, placing it just below the ‘Prime’ threshold of C.

Fluvius System Operator CV, the Flemish utilities and network operator, mandated ISS ESG to assist with the verification of its inaugural green bond under its new Green Financing Framework. ISS ESG found the bond is well aligned with ICMA’s Green Bond Principles, Loan Market Association’s (LMA) Green Loan principles and with the EU Green Bond Standard. The green bond will (re-)finance eligible assets including smart meters for electricity, LED lighting, wastewater transportation grids, and distribution and integration of renewable energy into the power grid. The selected proceeds’ categories have a significant contribution to the SDGs 6 ‘Clean Water and Sanitation’, 7 ’Affordable and clean energy’ and 13 ‘Climate action’. Moreover, Fluvius holds ‘Prime’ status.

Alpine, a special purpose vehicle owned by Credit Suisse, has returned to the market with a new green commercial paper amounting to $265 million. The issuance will refinance solar p.v. and wind energy. ISS ESG provided a SPO on the ESG risks attached to the transaction and found that the overall sustainability quality of the asset pool, in terms of sustainability benefits, risk avoidance and minimization were managed appropriately. The asset pool contributes positively to SDGs 7 “Affordable and clean energy”, 11 “Sustainable cities and communities” and 13 “Climate action”.

Ellaktor, the Greek energy producer, received a CBI post-issuance certification. The proceeds of the transaction issued in December 2019, were used to finance and refinance solar and wind electricity generation assets in Greece. The assets align with CBI standards’ eligibility criteria for the solar and onshore wind categories.

Samhällsbyggnadsbolaget i Norden AB, the Norwegian real estate manager, mandated ISS ESG to assist with the verification of its inaugural Sustainable Financing Framework. The proceeds will be used to fund or refinance eligible green and social project categories in Norway, including green buildings, energy efficiency, affordable housing, education, and health and care facilities.

ISS ESG provided a SPO for this issuance and found that the sustainability quality of the project categories was positive and the framework was well aligned with the Social Bond Principles. The categories have a significant contribution to SDGs 3 ‘Good health and well-being’, 4 ‘Quality education’, 10 ‘Reduced inequalities’, 11 ‘Sustainable cities and communities’, and a partial contribution to SDG 7 ‘Affordable and Clean Energy’ and SDG 13 ‘Climate Action’.

The issuer received a ‘C-‘ ISS ESG Corporate Rating, placing it just below the ‘Prime’ threshold of C.

Kanton Basel-Stadt mandated ISS ESG to assist with its Green Bond re-verification. The proceeds of the bond will be invested in green real estate located in the city of Basel. ISS ESG concluded that the framework and asset pool was well aligned with the ICMA’s Green Bond Principles and ISS ESG’s Key Performance Indicators. The issuer achieved a ‘B+’ ISS ESG Corporate Rating , thereby obtaining a ‘Prime’ status.

Deutsche Bank mandated ISS ESG to assist with its Green Bond re-verification. The green financing instrument will (re-)finance eligible asset categories including: renewable energy, green buildings and energy efficiency. These use of proceed categories have a significant contribution to SDGs 7 ‘Affordable and clean energy’, 11 ‘Sustainable cities and communities’ and 13 ‘Climate action’. The environmental and social risks associated with these assets have been well managed. Deutsche Bank holds a ‘C’ ISS ESG Corporate Rating classified as ‘Prime’ status.

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