Financing sustainable projects
Sustainable bonds
Commitment to Sustainability
The Community of Madrid dedicates a substantial proportion of its budget to social and environmental spending. By issuing sustainable debt, the Community of Madrid contributes to its social as well as environmental policies and actions. Alignment of the financing strategy with the sustainability strategy is achieved.
By issuing sustainable financing instruments, the Community of Madrid contributes to social and environmental objectives at the global, EU and national level. As well as the achievement of the UN Sustainable Development Goals (SDG). Likewise, it achieves sustainable growth for the citizens of the Community of Madrid and addresses the growing demand for more sustainable assets from responsible investors, contributing to the development of a sustainable market. With these sustainable instruments, the Community of Madrid in turn manages to diversify its investor base aimed at SRI investors and green investors (Dark Green), while fostering relationships with existing investors.
Why is it excellent?
The Community of Madrid is committed to integrating sustainable development and social responsibility in all its activities, while playing a key role in promoting sustainable development initiatives in the territory.
Social expenditures include various programs such as the financing of public policies related to public health, education, social services, the promotion of employment, public transport and social housing. The objective of the Community of Madrid spending on social programs is to strengthen the socio-economic recovery of Madrid and improve social cohesion, thanks to the development of public services that benefit all citizens and the implementation of programs to promote employment through the investment in small businesses.
In addition, the Community of Madrid has an important environmental mandate. Almost 50% of the area of the region is protected due to its environmental protection and conservation value. The geoeconomic situation in Madrid creates the need to implement policies to manage pollution and waste treatment in densely populated urban areas.
Regarding the latter, the Community established its Strategy for Sustainable Waste Management for the period 2017-2024. In relation to climate change and air quality, the Blue Plan + 2013-2020 has been the backbone for eight years, with a particular focus on tackling pollution and promoting energy efficiency.
Among the measures established in the Blue Plan +, which is expected to be followed by a new Plan as of 2021, the following objectives are included by sector, which are representative of the general sustainable strategy of the regions:
- Transport: modernization of taxi and bus fleets with greener vehicles, improvement of bicycle infrastructure, tax incentives for the transition to greener technologies in private transport.
- Industry: reduction of emissions from industrial activities, such as NOX produced by cogeneration plants
- Residential / commercial / institutional: use of clean fuels for domestic heating, energy efficiency improvements, smart grids
- Agriculture: sustainable management of forests, promotion and development of biomass energy.
In the social category, there is a Strategy for Social Inclusion 2016/2021, within the framework of the Europe 2020 Strategy, which seeks to eradicate extreme poverty in the region.
Who is involved in the initiative?
The Community of Madrid participates as issuing entity in the Sustainable Bonds, which has a clear social and environmental mandate under the Sustainable Financing Framework of the Community of Madrid that complies with:
- Green Bond Principles by ICMA1, Principles of the Social Bonus, Sustainable Bond Guidelines
- Green Loan Principles LMA
The Sustainalytics Agency considers that the Sustainable Financing Framework of the Community of Madrid is credible and with high impact and is aligned with the Principles of Green and Social Bonds and the principles of green loans.
On the other hand, there are both national and international investors who, in addition to seeking a profit, are aware of social and environmental goals. Since finding this investor profile is ever more frequent, and given the fact that the Region of Madrid has pioneered and recurrently issued this type of bonds as a strategy and has formalised several social or green contracts, it has now been able to expand its investment base and add value to its debt.
Some figures
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First Autonomous Community to issue Sustainable Bonds
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Sustainable Bonds issued with the highest volume in Spain
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Ability to issue green, social and sustainable loans and bonds
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5 issues of reference public Sustainable Bonds since 2017
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59% of the 2020 annual issuance of the Community of Madrid are Sustainable Bonds (53% of Sustainable Financing in the total financing of 2020)
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Higher volume of placement in Sustainable Bonds (€ 5.803 million)
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Transparent and public reports on projects funded by the framework
Volume (Mill. €) Broadcast date Term Sustainable Bond (Public) 700 18/07/2017 5 Sustainable Bond (Public) 1.000 23/02/218 10 Sustainable Bond (Public) 1.250 14/02/2019 10 Sustainable Bond (Public) 1.250 27/02/2020 10 Sustainable Bond (Public) 1.000 26/03/2021 10
