Sustainability Bond #10 of the State of North Rhine-Westphalia

As in the previous year, the issue assessed the extent to which the Bond's environmental projects are aligned with the EU Taxonomy regulation. For the first time, it was shown for the Bond’s social projects how they would fit the proposed Social Taxonomy using a high-level AAAQ analysis.

The concept of the Sustainability Bonds is closely related to the Sustainability Strategy for North Rhine-Westphalia which was adopted in 2016 and updated in 2020. The content, goals and measures of the strategy are closely aligned with the goals of the German Federal Strategy for Sustainable Development (2018 update) and the 17 Sustainable Development Goals. Ecological, economic and social interaction are equally taken into account.

The tenth Sustainability Bond refers to more than 50 eligible social and environmental projects of the State’s budget 2023, which strengthen the State's sustainable development. The projects were selected based on the criteria described in the framework published in 2021. Focal areas are education, research and renewable energies. As with the previous Sustainability Bond issues, ISS ESG has reviewed the eligible projects and rated them positively. Furthermore, ISS ESG confirmed that more than half of the planned expenses for environmental projects are aligned with the EU taxonomy regulation. This means that the underlying projects meet the defined Technical Screening Criteria as well as the Minimum Social Safeguards of the EU Taxonomy regulation, while at the same time not significantly harming the other environmental goals.

Investors' response to the State's Sustainability Bonds has been extremely positive. The State of North Rhine-Westphalia was awarded the prize for “Most Impressive Municipal/Local Authority Green/SRI Bond Issuer” (2017) / “Most Impressive Local Government Green/SRI Bond issuer" (2019, 2021, 2022) by “GlobalCapital” four times. The State also performs well in sustainability ratings. As in previous years, the State of North Rhine-Westphalia was given the top grade "advanced" by the sustainability rating agency Moody's ESG Solutions and was able to improve by one point compared to the previous year to 65 points. This puts North Rhine-Westphalia in second place in a comparison of 29 European regional authorities.

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