Introduction and History:
Over the last 6-12 months we have seen a number of Oil + Gas companies issue Sustainability Linked Bonds and borrow in Sustainability Linked Loan Format such as ENI, Repsol, Total etc.
We have even seen Groups such as PTTEG from Thailand issue in Green Format (although proceeds were used for forestation and carbon sinks which has nothing to do with the core business of the group).
It has taken some time for O+G names to enter back into the market after Repsol’s original green bond in 2017 which was heavily criticized.
We will have a look at key elements of these deals and discussion points to better ascertain if we are being fossil fooled with these type of transactions
Critical Elements to Consider:
Future Developments:
We believe the above issues are crucial to be addressed to have any form of credibility for O+G names participating in Sustainable Finance.’
We also see that hard to abate sectors and those which are heavily contributing to global warming should not just be aiming for Sustainable Finance structures that support targets and initiatives that make performance less bad.
We need to see targets and ambitions that fundamentally drive transformation and large changes in business models through transparent plans and solid levels of capex, R&D etc in transition.
Sustainable Finance in this sector is about supporting trans-formative change and not just about being less bad!
