Euronext - 2019 Universal Registration Document

Euronext, a sustainable exchange

Euronext’s Five ESG Impact Areas and the Sustainable Development Goals

FIG. 1 GROWTH OF GREEN BOND ISSUES LISTING ON EURONEXT.

Recent academic research has shown that high ESG ratings are correlated with lower cost of capital, market-based outperformance and accounting-based outperformance. Harvard Business School discovered that “high sustainability” firms outperform “low sustainability” firms over the long haul with lower volatility. A.3. ESG Data Hub The ESG data hub provides asset managers asset owners and other investors with access to a range of third party ESG data that provides greater insight into the ESG status of companies in which they invest. Investors are increasingly looking for ESG data on companies to meet commercial and regulatory requirements, but often have trouble identifying and validating credible sources of this data. By providing a single point of access to a range of validated ESG content providers, Euronext can offer a credible one-stop shop to meet investors requirements. The ESG hub currently has one product live: China A Share Environmental Risk Assessment (ERA). The China A-Share ERA product provides a qualitative environmental risk analysis on leading Chinese firms, considering local factors and using locally sourced data to create quantitative and objective indicators that allow investors to measure a company’s true environmental risk. n Systematic and objective measurement of geographical and industrial constraints: The supply of natural resources and policy constraints vary depending on geographic location. Using geographical and industrial factors as the basis for methodology allows a more accurate, stable and credible risk analysis. n Local methodology: Raw data from official public and local government sources, combined with company reports. This reflects the real environmental risk situation of Chinese companies. n Detailed data on specific resource stresses: Helps investors identify the source of the risk. n Adjusted for company’s environmental management capabilities: The final score integrates the company’s performance and its processes for environmental risk resilience. n Further ESG services will be added to the hub over the course of 2020. A.4. Euronext Green Bonds: The inaugural Euronext initiative in the ESG fixed income space A green bond is a bond whose proceeds are used to fund environment-friendly projects. At COP21 (Paris 2015), institutional investors representing $11.2tn undertook to work to grow a green bonds market. The green bond market has seen strong growth, with very healthy issuance increase from 2014 when $37bn was issued. In 2019, global green bond issuance reached over $200bn, setting yet another record. Market consensus projects that green bond issuance in 2020 will exceed 2019 issuance levels. Statistics vary regarding total outstanding global green bond issuance. However, approximately 1/6 th of total outstanding green bond issuance is listed on a Euronext market. As illustrated in Fig. 1 below, green bond issuance listed on Euronext increased 54.65% from 2018 (€33.669bn.) to 2019 (€52.073bn.)

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There are green bonds listed on all Euronext locations with Paris being the leading listing location and both Dublin and Amsterdam also very strong. Oslo is an interesting market with a small total issuance amount but from a large number of issuers (22 of 108 issuers). As of Jan 3 rd 2020 there is €131.69bn in green bond issuance listed on a Euronext market: Paris (€66.08bn), Dublin (€34.44bn), Amsterdam (€23.11bn), Brussels (€5.05bn), Oslo (3.030bn) and Lisbon (0.05bn).

FIG. 2 LISTING PER EURONEXT LOCATION

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Issuer types listed on Euronext include sovereign, non-financial corporate, local government, government backed entity, financial corporate, development bank and ABS issuers. Sovereign issuance accounts for the largest average issuance amount per issuer and includes issues from The Republic of France, The State of the Netherlands, The Kingdom of Belgium and the Republic of Ireland. The Republic of France is Euronext’s largest green bond issuer with over €20bn in issuance outstanding listed on Euronext Paris. Euronext green bond listed financial corporates include ABN, ING, KBC, BPCE, Société Générale and BNP Paribas. Local government issues are predominantly French and include Région des “Hauts de France” and Région “Ile de France”. Government backed entities are also mostly French and include Agence FSE de Développment, SNCF Reseau, RATP, Société du Grand Paris and EDF. The principle non-financial corporates are mostly energy companies and include ENEL, Tennet and Engie.

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2019 UNIVERSAL REGISTRATION DOCUMENT