Our New Year Wishes: reflecting on 2020 and contemplating 2021

Newsletter

Bonne Année!

Wishing you all health, happiness, and a more sustainable future in the New Year ahead!

 

This time of the year is an excellent occasion to reflect on achievements and lessons after a year that was deeply impacted by the effects of COVID-19. As the virus swept across the globe, it led to widespread social and economic disruptions, which are likely to drastically change working habits and practices in the mid-to long-run (read our analysis in April 2020). Rather than halting efforts towards sustainable development, the crisis has served as a catalyst for greater change (see our June Editorial “Covid-19 crisis in Europe: a midwife for a federalist green & social leap forward”).

 

In this incredible year 2020, ballots and political decisions have reshuffled the stars: President-elect Joe Biden will be in a position to implement parts of his green agenda (find out our report), the U.S. will rejoin the Paris Agreement while the EU, China, and Japan have committed to net-zero targets (read our article here).

 

In this particular context, Natixis’ CIB Green & Sustainable Hub has kept its dedication to bringing innovative and high-integrity features to its various clients and stakeholders, closing many “first!” new transactions within a robust workflow (see our deal section), such as the first-ever Low-carbon Aluminum Repo with Trafigura in the trade finance space, or the first ESG-Linked LBO in France with Kersia. Our “SDG franchise” has been consolidated with the Federal governement of Mexico (UMS) and the Group AFD’s SDG Bond programs and inaugural issuances. With NRG, we have had the chance to structure the first Sustainability-Linked Bond from a North American issuer and from a power company outside of Europe. In Asia, we notably acted as Joint Global Coordinator in the first self-labelled international blue Bonds issued by a commercial bank with Bank of China. On the investment solutions side, we have designed the first ever social bond & climate index in a structured product (“Développement des Territoires”) for the French insurer Groupama. It has been awarded “the Equity-linked product of the Year” by the Banker. 

 

In the meantime, our team has been growing to reach close to 20 members and has welcomed various profiles with diverse backgrounds and experiences (see bio section here).

 

We have been active in content creation and market intelligence, with our Center of Expertise & Innovation (find out our publications), particularly focusing on reviewing the various scenarios and enablers of the “Transition”, namely the role of natural gas or hydrogen in a low-carbon economy. We also contributed to innovation and market integrity with the drafting of the ICMA Sustainability Linked Bond (SLB) Principles and Climate Transition Working Group, and our G&S Syndicate team’s dedicated investor surveys (on the use of Social Bond format in the fight against the COVID-19 and market expectations on SLB). We updated our ESG scoring and ESG book analysis methodology to help our issuer clients optimize the distribution of their sustainable bonds and favor allocation towards the most advanced responsible investors, in search of environmental and social impacts.

 

2021 avenues  

The relenting pressure of sustainable finance regulation will not cease. The EU Taxonomy delegated acts will be released in early 2021, marking a decisive milestone for this Regulation.

 

Our thematic focus for the new year will remain on the transition of high-emitting industries (soon to come the final report of our “Transition Tightrope” Series following the publication of market practitioners’ successive interviews), expand further on social topics, and explore natural capital. We are convinced that the importance and relevance of social matters are here to last after a boom of the Social Bond market in 2020 as a result of expanded global social protection schemes alongside increased health expenditures. Natixis has also had the opportunity to play a role in the structuring of Social Bonds programs in 2020, most notably with Unédic & CADES, and will continue supporting clients willing to improve and highlight their positive social impact in 2021.

 

GHG emissions abruptly declined in 2020 at a level similar to what is necessary to achieve the Paris Agreement goals. However, the social cost of suchlike an unintentional emissions drop illustrates the challenge ahead of us and highlights the fact that attention should be paid to social capital and that the transition must be fair.

 

In any case, stay tuned for all our exciting upcoming projects. We would like to wish you a strong recovery in 2021 and we strive to accompany you throughout these journeys.