SCI Lamartine successfully issued its €500 10-yr inaugural Green Bond issuance dedicated to energy-efficient housing

Newsletter

4 - minute read


Natixis acted as Global Coordinator and Green Structuring Advisor and active Bookrunner for the issuance of €500 million inaugural Green Bond.

On Thursday 14th April, SCI Lamartine, a French residential real estate player, directly owned by CNP assurances and CDC Habitat successfully priced its inaugural €500m 10yr senior unsecured Green Bond. The proceeds will be exclusively used to finance or refinance, in part or in full, new and/or existing eligible Green Projects as set out and defined in the Lamartine Sustainability Bond Framework, which follow the technical screening criteria of EU Taxonomy Regulation [1] and Climate Delegated Act [2], in two main eligible categories: green buildings and energy efficiency. Eligible assets will have to meet the following criteria: 

Figure 1: Eligibility criteria per category as set out in Lamartine Green Bond Framework

Green buildings

Acquisition of residential buildings located in France, either existing or currently under construction, which meet the following eligibility criteria:

  • Buildings built before December 31st, 2020, either with an Energy Performance Certificate (EPC) level at least equal to “A” or belonging to the top 15% most energy efficient buildings of the national building stock
  • Buildings built after December 31st, 2020, with Primary Energy Demand (PED) at least 10% lower than the relevant national threshold set for nearly zero-energy building (NZEB) requirements

And

  • Buildings must have obtained, or target to obtain upon completion or after refurbishment, either environmental certification NF Habitat, H&E (“Habitat & Environment”) or NF Habitat HQE

Energy Efficiency

Investments in individual energy performance improvement measures aiming at improving energy efficiency – eligible investments are investments that are aligned to the technical screening criteria (TSC) of the EU Taxonomy:

  • 7.3 Installation, maintenance, and repair of energy efficiency equipment
  • 7.4 Installation, maintenance, and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)
  • 7.5 Installation, maintenance, and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings
  • 7.6 Installation, maintenance and repair of renewable energy technologies

Source: : Authors (based on Lamartine Green Bond Framework)

In addition, eligible Green Projects must comply with the following additional criteria:

  • Residential buildings must be located at a distance to public transport not exceeding 1000 meters ; and
  • Must be located in areas with a lack of housing supply as defined by the State (A, Abis, B1, B2) and rated as Very Dynamic or Dynamic / Dynamic micro-market according to the internal rating tool of CDC Habitat ; and
  • All off-plan projects must include eco-design considerations from the early stages of the design process of the building with the objective to limit the project’s environmental impact by optimizing energy efficiency, carbon footprint, waste management, water management, biodiversity preservation and land artificialization prevention.

The issuer will report annually on the allocation of proceeds as well as the environmental performance of the eligible Green Projects included in the portfolio on an annual basis, against the following indicators:

Figure 2: Indicators against which Lamartine committed to report

Green buildings

  • Energy consumption (in kWhep/m²/year) based on energy performance certificate (EPC) obtained and difference with average French residential portfolio (Ademe’s benchmark)
  • Avoided GHG emissions (tCO2eq/year) based on the climate performance certificate (CPC) obtained and the difference with average French residential portfolio (Ademe’s benchmark)
  • Energy-efficiency improvement achieved by refurbishment of existing buildings
  • Environmental certification
  • Average distance to public transportation means
  • Allocation of the buildings by areas

Energy Efficiency

  • Examples of energy-efficiency improvement investments
  • Number of energy-efficiency improvement projects

Source : Authors (based on Lamartine Green Bond Framework)

In Europe, buildings account for 40% of energy consumed and 36% of energy-related direct and indirect greenhouse gas emissions. Therefore, the real estate sector is a key lever in achieving the objectives set by the Paris Agreement to keep global temperatures from rising more than 2°C, with an ideal target of 1.5°C, by 2100.

The SCI Lamartine’s portfolio is on track to meet the 2040 trajectory of France National Low Carbon Strategy:

  • The energy performance of the total portfolio of existing assets is currently 103 kWhEP/m²/year, outperforming the total portfolio of CDC Habitat (144 kWhEP/m²/year) ;
  • Including the real estate assets currently under construction (Off-plan portfolio) with high energy, the overall energy performance level of the portfolio (52% of which is composed of Off-plans) is already reaching the 2050 objective of CDC Habitat ;
  • 99% of the existing assets have energy labels better than D with an average label of C ;

Some dwellings (less than 1% of the stock) have E-labels and will be treated as a priority in the Capex plan.

Figure 3: Lamartine’s energy performance target trajectory

Source: Authors (based on Lamartine Green Bond Framework)

In order to support its ambition to maintain and further improve the sustainability performance of the portfolio over time the SCI Lamartine has formalized an extensive impact investing strategy with 5 main objectives:

Figure 4 and Table 1: Presentation of Lamartine impact investing strategy

Environmental aspects

  • New buildings; selection of buildings with best-in-class energy and environmental performance and targeting environmental certifications for a majority of operation
  • Existing buildings; improvement of the energy and environmental performance of the building portfolio through a systematic policy of collecting energy consumption and greenhouse gas emissions, diagnosis and audit of energy-intensive buildings and implementation of improvement measures adapted to the operational and building specificities of each building
  • Contribute to the development of sustainable transportation via soft mobility; development of suitable facilities and adequate equipment
  • Improving waste management; development of suitable waste facilities and equipment for selective sorting
  • Encourage the greening of buildings wherever possible in order to meet a dual issue: the preservation of biodiversity and adaptation to climate change

Social aspects

  • Affordable rents in undersupplied areas in France
  • Select buildings that meet the needs of the territories:
    • Close to a public transport offer
    • Promoting residential and functional diversity
  • Measurement of tenant satisfaction and support for the residential journey
  • Promotion of a participatory and collective approach with tenants on environmental and social issues: awareness-raising actions on eco-gestures concerted initiatives with tenants 
  • Promote private and collective outdoor spaces in order to rethink uses and adapt housing to new lifestyles 

Governance aspects

  • Strong governance set-up with all stakeholders being ultimately backed by the French state
  • Long-term commitment to SCI Lamartine by CDC as the parent of CNP and CDC Habitat (15 years)
  • Policies in place to ensure ethical risks are controlled and supply chain is monitored diligently, for example by:
    • Integrating ESG clauses in contracts with service providers
    • Regularly monitoring compliance with ethics procedures defined by CDC Habitat's Corporate Social Responsibility approach
    • Systematic due diligence in the fight against money laundering and the financing of terrorism

Source: Authors (based on Lamartine Green Bond Framework)

With the issuance of green bonds SCI Lamartine aims to further support its impact investment strategy, and notably its environmental commitments, with impactful and transparent bond instruments thus underpinning its ambition to align its financing strategy with its investment strategy and notably the achievement of exemplary objectives in order to promote energy-efficient housing.

The Framework is aligned with ICMA’s 2021 Green Bond Principles (GBP), Social Bond Principles (SBP) and Sustainability Bond Guidelines (SBG) and Moody’s ESG Solutions has provided a Second Party Opinion on the Sustainability Bond Framework. Natixis Green & Sustainable Hub assisted Lamartine SCI’s team to structure this Sustainability Bond Framework highlighting the company’s ambition to become an active player of sustainable finance.


To go further:

  • Framework, SPO and Investor Presentation available here

[1] Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020
[2] Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021