Pfandbrief banks adopt minimum standards for public green Pfandbriefe
Berlin, September 20, 2022
The banks which together make up the Association of German Pfandbrief Banks (vdp) have drawn up minimum standards for the issuance of public green Pfandbriefe. Following on from the publication of minimum standards for green mortgage Pfandbriefe and for social Pfandbriefe, this is now the third sustainability framework with which the vdp provides issuers and investors with orientation.
The minimum standards are based on the Green Bond Principles of the International Capital Market Association (ICMA). They contain transparency requirements and stipulate an external assessment and regular impact reporting. Public green Pfandbriefe can be used to refinance eligible public-sector loans at the central, regional and local government level which serve an ecologically sustainable purpose. The issue proceeds are used exclusively to (re-)finance suitable assets. These include, among others, the areas of renewable energy, energy efficiency, pollution prevention and control as well as sustainable (waste) water management.
“With our minimum standards for public green Pfandbriefe, the vdp supports the sustainable transformation of the economy by establishing a further reliable framework for Pfandbrief banks and investors,”
Sascha Kullig, a member of the vdp’s Management Board, pointed out. New issues of sustainable covered bonds have been on the increase for years – as the issuance figures of green and social Pfandbriefe demonstrate.
Bayerische Landesbank had previously issued the first public green Pfandbrief in June: a bond with a volume of EUR 500 million and a term of ten years.
Sustainable Pfandbriefe with a total value of almost EUR 16.5 billion are currently outstanding. The Pfandbrief banks have thus established one of the leading markets for sustainable covered bonds in Europe. Since 2019, the vdp has been responsible for the trademark rights for the "green Pfandbrief" product and concludes licensing agreements with interested Pfandbrief banks.