Sustainable Finance at the Heart of EIB: Investing in a Sustainable Future

2. EIB – Sustainable finance Adina Relicovschi, DeputyTechnicalAdviser Environmental, Climate and Social Office, Projects Directorate December 2018

3. Overview • Sustainable Finance – at the heart of the EIB; • Responsible and Sustainable Investment – how EIB finances a sustainable future; • Responsible Guidance – how we ensure sustainability of our operations; • Focus Topics: the circular economy, economic resilience, natural capital, gender in lending.

4. EIB at a glance • The EU's bank:The EIB is the European Union's long-term lending bank set up in 1958 by the Treaty of Rome, headquartered in Luxembourg. It is the only bank owned by and representing the interests of the 28 EU Member States and works closely with other EU institutions; the finance and assistance we provide contribute towards the achievement of EU policy goals. • A major player: is the largest multilateral lender and borrowerin the world with, a record number of, 901 approved operations (2017) in more than 160 countries.

5. 2017 in figures European Investment Bank Group

6. 2017 in figures

7. Sustainable finance – at the heart of EIB Sustainability: • In our operations: environmental and social impact of the operations and transactions that EIB supports in its lending, investment and advisory activities – any operation should meet one or more EU policy objectives for supporting smart, sustainable and inclusive growth; • Through due diligence: all project supported must meet EIB e&s standards; economic appraisal (assess costs and benefits taking into account all resources needed); carbon footprint exercise (estimate and report on GHG emissions).

8. Sustainable finance – at the heart of EIB Green & Sustainability Awareness Bonds: • EIB pioneer role in green bond market (2007): one of the largest issuers of green bonds with more than EUR 23 billion of Climate Awareness Bonds issued; • First Sustainability Awareness Bond: 06/09/2018 launch date (EUR 500 m) demonstrates the EIB’s firm commitment to unlocking finance for high impact projects in sustainable sectors beyond climate.

9. Sustainable finance – at the heart of EIB Green & Sustainability Awareness Bonds: • Sustainability Awareness Bond: initial focus on water projects (water supply, sanitation and flood protection) and expected expansion to other sectors: • sustainable use and protection of water and marine resources; • transition to a circular economy, waste prevention and recycling; • pollution prevention and control; • protection of healthy ecosystems.

10. Responsible and inclusive lending • Support for SMEs: is a public policy goal of the EIB. In order to finance micro, small and medium-sized companies, the EIB typically use an intermediated business model. Financial contracts are signed between the EIB and their intermediaries, who commit to finance underlying SMEs. • Different nature of e&s due diligence: focuses on the capacity and capability of the intermediary to manage the e&s aspects, including an assessment of the adequacy and the effectiveness of the ESMS the intermediary has in place. • New standard on FI : to be approved in 2019.

11. Responsible and inclusive lending • Environment: is a public policy goal of the EIB and includes financing for projects fostering environmental protection (including the protection or enhancement of the natural resources and actions taken against degradation), renewable energy, energy efficiency, water and waste management, and sustainable transport. • Climate action: is a cross-cutting objective. In 2017, EIB signatures for climate action stood at EUR 19.4 billion, representing more than 28% of our total financing across all areas of activity, thus successfully meeting our target of devoting more than 25% of our financing each year to climate change mitigation and adaptation activities.

12. Responsible Guidance • Meeting key environmental and social standards: • The EIB Statement on Environmental and Social Principles and Standards (2009) sets the policy context for protection of the environment and human well-being in our projects. • The principles and standards are further explained and developed in the EIB Environmental and Social Handbook - ten standards that must be met by any investment, technical assistance or advisory project that is undertaken by the EIB.

13. EIB Environmental and Social StandardsAn integrated Approach • Understanding operations in the context of wider global drivers: Human Rights, Climate Change, Biodiversity – these are integrated and cut across all EIB activities and practices • The E&S Principles are operationalised by the 10 E&S Standards and complement the financial and economic criteria in the appraisal of projects • Aligned with other IFI E&S Standards • Standards apply to both public and private sector and to all regions

14. Responsible Guidance • Transparentproject cycle: • The outcome of the EIB environmental and social due diligence is summarised in an Environmental and Social Data Sheet as part of EIB commitment to transparency. Project-related environmental documents are available in the Public Register on EIB website. • Climate mainstreaming: the carbon footprint of EIB projects (absolute and relative emissions) and the annual report.

15. Focus topics • Circular economy: • EIB financing is available for circular economy projects on account of their environmental, resource conservation and climate benefits and can also contribute to the EIB’s innovation objective, since such projects often include innovative features for products, production processes or business models that drive innovation. Circular economy projects implemented by small and medium-sized companies (SMEs) can also be eligible for EIB financing. In addition to financing, the EIB provides advisory support to circular economy project promoters.

16. Focus topics • Circular economy – relevant sectors: • Waste management sector: more ambitious recycling targets that drive developments and investments in new separate collection infrastructure and related treatment facilities for recyclable materials and bio-waste. The goal will be to do more with regard to quantities and do better with regard to qualities of material. • The circular economy idea applicable to other, related areas: water sector, agriculture and forestry value chain, industrial production.

17. Focus topics • Natural Capital: • The new Natural Capital Financing Facility (NCFF) – a joint initiative of the European Commission and the EIB – supports projects that protect and promote biodiversity and climate adaptation with targeted loans and investments. 2017 saw the first loan signed under the programme. • The NCFF provides funding to projects that promote the conservation, restoration, management and enhancement of natural capital for the benefit of biodiversity and adaptation, including ecosystem-based solutions to challenges related to land, soil, forestry, agriculture, water, and waste in the European Union.

18. Focus topics • Natural Capital Financing Facility: consists of a combination of the following two components: • the finance facility provides financing from EUR 2 million to EUR 15 million, • the technical assistance facility gives every project a grant of up to EUR 1 million for project preparation, implementation and the monitoring of outcomes. • The first loan was signed in April 2017 - EUR 6 million to Rewilding Europe Capital (REC) and is expected to provide support for over 30 nature-focused businesses across Europe. These investments could also boost the populations of iconic and endangered European wildlife species.

19. Advisory and Technical Assistance • Advisory services complement the EIB’s lending activity and form an integral part of EIB ‘lending, blending and advising’ strategy, by making technical and financial expertise available to the clients to develop and implement investment projects and programmes, and to improve institutional and regulatory frameworks. • Project-related technical assistance contributes to improving the quality of lending operations throughout the project cycle and enhancing their development impact (mainly in the non-European projects), focusing on: • Financial sector operations, notably microfinance support and SME lending; • Infrastructure projects, notably in the water and wastewater, ICT, transport and energy sectors.

20. MeHSIPResultsin a Nutshell

21. MeHSIP – Lessons learned • Programme duration (3 years) was not sufficient to cover the full cycle of projectpreparation and exploit all the projectopportunitiesidentified; • Mobilisation of senior experts in HQ and in local country offices provided for great efficiency in deciding about projects selection and preparation; • Need for readily available TA grants for funding of preparatory studies and for fast track procurement approaches (e.g. framework contracts) to minimise administrative delays; • Alignment of regional programmes withEU Delegationprioritiesshouldbeenhanced. European Investment Bank Group

22. Contacts Thank you relicovs@eib.org • EuropeanInvestment Bank100, bd. Konrad Adenauer L-2950 Luxembourgwww.eib.org