Crédit Agricole CIB, the Corporate & Investment Banking arm of the Crédit Agricole group, announced an agreement today with multinational power company Enel, creating a sustainability-linked foreign exchange derivatives framework.
Securities issued under sustainability-linked frameworks have attributes including coupon payments tied to an issuer’s achievement of key performance indicators (KPIs) and associated Sustainability Performance Targets (SPTs). These instruments are becoming increasingly versatile, leading to substantial innovation in sustainable finance. Today’s announcement marks one of the first sustainability-linked frameworks to be tied to forex derivates.
The new agreement is based on the accumulation of a sustainability premium as a result of a specific formula linking all of Enel’s foreign exchange derivatives transactions to the company’s Sustainability KPIs. Crédit Agricole CIB stated that the agreement paves the way for the future implementation of sustainable principles across more financing products.
Tanguy Claquin, Global Head of Sustainable Banking at Crédit Agricole CIB, said:
“Crédit Agricole CIB is proud to partner with ENEL in establishing the first Sustainability-Linked Forex derivative programme. Its launch is a clear success demonstrating the important role derivatives can play in sustainable finance, the transversality of the Sustainability-Linked Bonds Principles and the ever increasing innovation capacity of ENEL in sustainable finance.”
Carlotta Martoglio, Head of Corporate Sales Italy, Crédit Agricole CIB, added:
“The innovative feature of the agreement is connected to the ability to link ENEL long term Sustainability Targets with short term FX transactions. Moreover, the Sustainability Premium mechanism is applied to all FX derivatives traded with ENEL in 2021, enlarging the spectrum of financial transactions falling under the scope of sustainable finance.”