Simmons & Simmons has advised Rabobank on the launch of a market first ESG Commercial Paper and Certificate of Deposit Programme. The ESG Programme offers short term investments in Rabobank as a leader in environmental, social and governance (ESG) performance. It further provides investors with more diversified investment opportunities and contributes to capital being channelled to more sustainably operating companies.
The debut issue under the ESG Programme, that amounted to €1.2bn, was highly successful in view of immediate acceptance by buy-side market parties. The size of the ESG Program is capped at €5bn. According to Rabobank, the ESG Programme offers them the opportunity to diversify their funding instruments and cater specifically to the needs of responsible investors.
The ESG Programme relies on Rabobank’s ESG Leader classification, which is based on an independent assessment of its ESG performance by Sustainalytics, a leading global provider of ESG research and ratings. Companies ranking among the top 5% of their industry peers, such as Rabobank, are classified as ESG Leaders within Sustainalytics’ coverage universe.
Unlike green bonds, which are marked by longer tenors and a focus on the sustainable use of proceeds, green commercial papers and certificates of deposit, given their short-term nature, rely on an assessment of the ESG performance of the issuing entity.
Commenting on the transaction, capital markets partner, Peter Voorhees says: “We are very pleased to have advised Rabobank on this first-of-a kind transaction which applies ESG research and ratings to money market instruments and contributes to a further expansion of the green financing sector.”
The Simmons & Simmons team was led by capital markets partner Peter Voorhees and included partner Marieke Driessen, managing associate Leon Yap and associate Shari Taylor.