Valeo Issues €600m Debut Green Bond with EIB Support

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by KnowESG
KnowESG_Valeo Issues €600m Debut Green Bond with EIB Support
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Valeo has proudly announced the successful completion of its inaugural green bond, a remarkable achievement that has seen them raise 600 million euros through bond issuance.

Notably, this marks the first-ever green bond issued by Valeo, and it has garnered significant interest, with the European Investment Bank (EIB) subscribing to the tune of 150 million euros.

A standout aspect of this endeavour is the establishment of an innovative green and sustainability-linked financing framework. This comprehensive framework encompasses reporting, governance, and verification mechanisms, assuring that the funds are directed exclusively towards initiatives aligned with the EU Green and Sustainability Taxonomy.

These encompass a diverse array of projects, including those related to production systems and the integration of cutting-edge technologies within categories such as clean transportation, renewable energy, energy efficiency, sustainable water and wastewater management, and the circular economy.

Valeo has identified a substantial pipeline of eligible projects, totaling approximately 2 billion euros. Some noteworthy examples include smart heat pumps, battery terminal management systems, electric motors, and compact, noise-efficient front-end cooling modules.

In a resounding commitment to sustainability, Valeo has set its sights on achieving carbon neutrality across its entire value chain by 2050. This ambitious target encompasses suppliers, operational activities, and the ultimate usage of products sold by the Group, encompassing direct and indirect emissions (Scopes 1, 2, and 3 emissions).

By 2030, Valeo has pledged to reduce its emissions by a significant 45%, measured in absolute terms compared to the 2019 baseline. The year 2030 represents a pivotal milestone on the path to carbon neutrality and underscores the urgency of their mission.

The issuance of these green bonds will empower Valeo to further diversify its portfolio of technologies that contribute to low-carbon mobility, with a particular emphasis on their pioneering solutions in vehicle electrification—a realm in which the Group stands as a global leader.

Valeo's commitment to sustainability has been underscored by its inclusion in the prestigious "CAC 40 ESG" index in March 2021, recognising its exemplary environmental, social, and governance practices.

Additionally, Valeo enjoys a longstanding and fruitful partnership with the European Investment Bank, having received a substantial 750 million euros in funding since 2020. These funds have been dedicated to investments aimed at reducing carbon emissions and enhancing active vehicle safety through advanced technologies.

These green bonds align seamlessly with the European Investment Bank's stringent criteria for climate action and environmental sustainability. Furthermore, this financial instrument complements the Bank's pre-existing long-term bank loan offerings.

Notably, this landmark operation represents a significant first for the EIB in France and is poised to attract long-term financing from the public debt markets, further bolstering green investments.

In reflecting on this achievement, Christophe Perillat, Valeo's CEO, expressed satisfaction with the success of their inaugural green bond, emphasising Valeo's leadership in electric vehicle development and sustainable mobility. He also commended the EIB's support, highlighting their pivotal role in financing the European Union's climate objectives.

Ambroise Fayolle, Vice-President of the EIB, echoed this sentiment, expressing delight at this transaction with a trusted partner of the bank. He underscored the EIB's commitment to the green transition and the innovation showcased by their teams.

As pioneers in green bonds since 2007, the European Union's Climate Bank is proud to contribute to attracting private sector financing for the energy transition by endorsing this green bond issue in France.

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Source: Valeo

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