Sustainable Finance Framework established to achieve 100% sustainable debt by 2035
Published: Sep 2024
Best Sustainable Treasury Solution
Highly Commended Winner
A2A
Photo of Paolo Alessio Viganò and Patricia Gentile, A2A.
Patricia Gentile
Group Head of Finance and Insurance
Carmen Grieco
Treasury Manager
Paolo Alessio Viganò
Head of Debt & Financial Planning
Marina Sabinina
Sustainable Finance Manager
The A2A Group (A2A) is the biggest multi utility in Italy and operates in the sale and distribution of gas, in the production, sale and distribution of electricity, in district heating, in environmental services and in the integrated water cycle. It is owned by the Municipality of Milan, the Municipality of Brescia and other shareholders. A2A headquartered in Milan and Brescia, Lombardy, Italy.
in partnership with
The challenge
The Italian multi-utility A2A wanted to finance ambitious goals around the energy transition and the circular economy by issuing sustainable debt through both use-of-proceeds and KPI-linked financing instruments. The Strategic Plan, updated in March 2023, includes a specific target for sustainable debt to account for 90% of its issuance by 2030 and 100% by 2035. The company needed to support its ambitions with a flagship Sustainable Finance Framework.
In recent years A2A Group has also been at the forefront in adopting other innovative sustainable finance instruments.
The solution
A2A has signed an agreement to be able to use the existing credit lines for the issuance of green guarantees, associated with a discount on the related commissions applied.
It is envisaged that the new guarantees may be classified as green if the underlying project is considered green taking into consideration the eligibility criteria based on A2A’s Sustainable Finance Framework, the EU Taxonomy of sustainable activities and the international guidelines in this regard (including the United Nations Sustainable Development Goals, the Green Bond Principles issued by ICMA and the Green Loan Principles issued by the LSTA and LMA).
The main categories of green projects included:
Renewable energy.
Waste collection and treatment.
Energy efficiency.
Network management.
Clean transportation.
This agreement is the first of its kind for the group and innovative for the market, which confirms A2A’s commitment as a pioneer in the field of sustainable finance, considered a fundamental lever to support the company’s strategy focused on sustainability and two pillars: energy transition and circular economy.
In general, A2A Group has been at the forefront in adopting innovative financial instruments. In 2021, a new Sustainable Finance Framework was launched combining, for the first time in Italy, two approaches:
Green – Use of Proceeds, which ensures maximum transparency of the use of proceeds for specific short-term projects.
The Sustainability-linked component, which links the debt instruments to one or more of the Group’s medium- and long-term sustainability goals.
Furthermore, in addition to issuing the various ESG financing instruments (among which: five Green Bonds, one Hybrid Green Bond, two Sustainability-linked Bonds, three Sustainability-linked RCFs and the loans of the European Investment Bank) and structuring sustainable time deposits and an ESG share buyback programme with a donation to Banco dell’Energia, A2A was the first company in Italy to stipulate a Civil and General Liability insurance policy linked to the achievement of five sustainability goals.
Best practice and innovation
Over the past few years, the volume of investments subject to assessments related to environmental, social and governance issues has increased, and new indices and portfolios have proliferated for which inclusion is based on sustainability performance.
*A2A is present in the following ethical indices:
MIB ESG.
FTSE4Good Index.
ECPI Euro ESG Equity.
Ethibel Sustainability Index Excellence Europe.
EURO STOXX Sustainability Index.
Euronext Vigeo index: Europe 120.
Standard Ethics Italian Index.
Solactive Climate Change Index.
Bloomberg Gender Equality Index.
A2A is also included in the Ethical Excellence Investment Register and in the Ethibel Pioneer Investment Register. A2A ranked 7th out of 67 companies evaluated in the ‘global water and multi utilities’ sector.
Key benefits
Cost savings.
Improved visibility.
Industry recognition – *see above.
Antonio Rossi
Sales Area Manager North-East Italy, Global Transaction Banking, Intesa Sanpaolo
A2A needed to finance projects in the areas of energy transition and circular economy. We put together various initiatives, including the structuring of a pooled revolving credit facility linked to corporate social responsibility objectives, a green bond for investments supporting ongoing transition, and other sustainable finance solutions to meet A2A’s needs.
in partnership with
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