Canada-based financial services company Scotiabank announced today the closing of its inaugural sustainability bond offering, raising US$1 billion in the largest deal of its kind to date by a Canadian financial or corporate.

Jake Lawrence, Group Head, and CEO, Global Banking and Markets at Scotiabank, said:

“Our clients look to Scotiabank for leadership in financing sustainable business growth. We are proud to have launched this USD 1 billion Sustainability Bond with three Diversity & Inclusion firms as active co-managers and to build on Scotiabank’s commitment to drive the evolution and enhancement of social responsibility initiatives.”

Companies globally have been increasingly turning to sustainable finance tools to support ESG-related initiatives. A recent report from Moody’s indicated that green bond issuance in the first quarter of 2021 soared to a record $99 billion, and estimated that sustainable bond issuance for the year will exceed $650 billion, substantially greater than last year’s record $491 billion.

Proceeds from the offering will be used to finance green or social projects or assets, as outlined in the bank’s recently released Sustainable Bond Framework, which updates the prior Green Bond Framework, which the bank used for issuance in 2019. “Green” categories carried over from the prior framework include renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, terrestrial and aquatic biodiversity conservation, clean transportation, sustainable water, and wastewater management, and green buildings.

The updated framework adds a series of “Social” categories for eligible investment, such as affordable basic infrastructure, including the development of infrastructure for underserved or remote communities; access to essential service, providing financing for facilities such as hospitals, care centers, and education; women-owned business lending; affordable/community housing; leadership in diversity & inclusion, and; creating economic resilience.

According to Scotiabank, the framework has received a Second-Party Opinion from Sustainalytics.

Meigan Terry, SVP, Chief Communications and Social Impact Officer at Scotiabank, said:

“We all have an important role to play in driving a positive impact on society while enabling sustainable development and the transition to a low-carbon economy for current and future generations. this inaugural Sustainability Bond offering helps Scotiabank put into practice the commitment we have made to improve society and drive meaningful change for every future.”