ALD issues first-ever Positive Impact Bond
ALD has issued a Positive Impact Bond (PIB) to finance the growth of its green fleet. “It’s a first not just in the leasing industry, but in automotive as a whole”, says Stéphane Renie, ALD’s Head of Corporate Social Responsibility.
The PIB is a €500-m, four-years fixed-rate senior note, the proceeds of which will be used exclusively to finance or refinance vehicles with the greatest positive contribution to climate change (CO2 and other greenhouse gas emissions) and human health (NOx emissions).
In particular, ALD has selected an initial portfolio of 14,348 green vehicles to be added to its fleet across 13 countries in Europe, 24% of which will be pure-electric vehicles (EVs), with the remainder being either hybrid-electrics (HEVs) or plug-in hybrids (PHEVs).
"ALD chose to issue this first-ever PIB with the ambition to diversify the funding of its fleet external to Société Générale, and to do this in a way that has a positive impact, both on the environmental and social level," says Renie.
ALD’s PIB is aligned both with the ICMA Green Bond Principles and the Principles for Positive Impact Finance, developed by the UN. In order to conform to the latter, Quantis developed a life-cycle assessment for ALD of the vehicles in question. Compared to a fleet powered solely by internal combustion engines, these vehicles avoid the emission per year of 17,000 tons of CO2 and 99,000 kg of NOx.
ALD’s first issuance of a PIB is not likely to be the last, says Renie. "The market permitting, we will issue more. Three factors determined why we did this. First, because ALD is committed to fund clean transportation and promote the transition to a low-carbon future. Second, because a lot of investors are very interested in investments that create a positive impact on health and the environment. And third, because we had a third party assess and quantify the positive impact of this measure."
This PIB – and future ones – will help speed up the ‘greening’ of ALD’s low-emission fleet. The company currently (H1 2018) has 84,000 EVs, HEVs and PHEVs in portfolio, which represents about 5% of the total fleet and a 50% increase versus the same period last year. ALD has the ambition to have an alternative fleet of at least 200,000 vehicles by 2020.
ALD has not set itself an end date for achieving a totally green fleet. "For starters, because there are various shades of green”, says Renie. “But we will continue to aggressively push alternative vehicles and remain ahead of the market."