Major utilities team up to launch sustainable finance hub for European businesses

The Forum's founding firms have issued two-thirds of Europe's green bonds by volume

The Corporate Forum on Sustainable Finance initiative was launched on Wednesday (16 January) and has been designed to encourage businesses and policymakers to view sustainable finance as a “critical” tool in the drive to limit global warming.

Founded by companies from across the utilities, transport, built environment and finance sectors, the Forum will act as a permanent network in which businesses can share best practice advice and collaborate to drive greater investment in green infrastructure projects.

Specifically, the group will lobby for ambitious standards and regulatory frameworks for sustainable finance instruments, promote best practices on impact reporting and promote green projects to investors.

By joining the Forum, member companies also commit themselves to “deeply integrating” sustainability into their respective financial strategies.

The 16 companies to have signed up to the forum so far are EDF, EDP, ENEL, ENGIE, Ferrovie Dello Stato Italiane, Iberdrola, Icade, Ørsted, RATP, SNCF Réseau, Société du Grand Paris, SSE, Tennet, Terna, Tideway and Vasakronan.

“Representing over two-thirds of green and sustainable bond volumes issued by European corporations, the Forum regards sustainable finance instruments as efficient market-based tools that allocate the economic resources where they are most needed, particularly to low-carbon and sustainable investments, which are central to our corporate strategies,” the founding corporates said in a statement.

“Sustainable finance is going to become an increasingly prominent issue with investors quickly adapting to these new trends and willing to allocate capital on sustainable initiatives.  As such, the Forum is an opportunity to put business at the forefront of the low carbon and sustainability transition.”

Green finance growth

The launch of the fund comes at a time when the UK’s socially responsible investing (SRI) market is growing rapidly, with Triodos predicting that it will grow by 173% by 2027 to reach £48bn.

Similarly, the global green bonds market is believed to have grown by a staggering 78% between 2016 and 2017, with national and institutional investors funnelling more than $150bn into low-carbon projects during the 12-month period.

Keen to take part in this green finance boon, several of the businesses participating in the new Forum have already made moves to bolster the sustainability credentials of their financial strategies in recent months.

Société Générale, for example, is one of four banks to have committed at last month’s COP24 conference to assist companies it invests in with aligning their respective sustainability strategies with the Paris Agreement goals.

Ørsted, meanwhile, is currently funnelling investment into a string of green developments, such as its first standalone battery project – a 20MW system in Liverpool – and the world’s largest offshore wind farm, Hornsea Project One, off the coast of Yorkshire.

Sarah George