RCBC’s green and sustainability bond issues:
Lessons learned one year after


One year after its milestone issuance of green and sustainability bonds, Rizal Commercial Banking Corporation (RCBC) said much has been achieved, but much still needs to be learned about sustainable finance in the country.

“The current COVID-19 global pandemic raises awareness about the vital role that sustainable finance can play in addressing urgent environmental and social needs such as renewable energy, clean transportation, and health care,” said Frederick E. Claudio, Chief Risk Officer and Executive Vice President of RCBC.

In 2019, RCBC marked several milestones in sustainable finance, not just in the Philippines, but in the ASEAN region. In February, it issued the first Green Bond from the Philippines under the ASEAN Green Bond Standards, raising P15 billion ($290 million). In June, P8 billion ($160 million) were raised from RCBC’s first peso-denominated Sustainability Bond under the ASEAN Sustainability Bond Standards. This was followed by an additional $300 million in September 2019.

One year later, these bond issuances have funded a total of 9,797 green and social projects amounting to more than P56 billion. Its sustainable lending portfolio comprised 10% of its total loans as of end-September 2020.

Under RCBC’s Environmental and Social Management System, all bank loans undergo a vetting process that takes into account the social and environmental impact a project may have on the environment and communities. “This process takes place before we decide to lend, and continues during the life cycle of the loan contract,” explained Mr. Claudio. This system has been in place since 2011 and is aligned with the Bangko Sentral ng Pilipinas Circular 1085 on Sustainable Finance Framework.

Beyond the numbers, RCBC has identified five lessons learned from its adoption of a Sustainable Finance Framework and embedding sustainable finance in its lending strategy and operations.

Lesson 1: Casting a wider net

As the financing instruments provided an opportunity for investors in the impact-investing space, demand comes from both domestic and overseas markets. In 2019, RCBC Green and Sustainability bond transactions were oversubscribed and brought in investors from all major financial centers of the world. “This provided RCBC the early-mover advantage and enabled us to widen our investor base and support for ASEAN Green and Sustainability bond initiatives,” said Mr. Claudio.

Lesson 2: Walking the talk

RCBC is guided by a Sustainable Finance Framework (SFF) in funding loans and projects that promote sustainable development. This means going beyond motherhood commitments and actively meeting the United Nations’ Sustainable Development Goals (SDGs) by investing in renewable energy, energy efficiency infrastructure, housing, health care and medicines, providing employment, education, and finance to those that need it, and sustainable treatment of wastewater, among others. It is estimated that as much as $12 trillion is needed to finance UN SDGs a year.

Lesson 3: Embracing global best practices

In designing the framework, RCBC engaged global third-party advisers ING Bank and Sustainalytics, a leading independent ESG research and ratings provider. Its framework also adheres to global definitions issued by the International Capital Market Association (ICMA) Green and Social Bond Principles, as well as the ASEAN Green and Sustainability Bond Standards. “We follow a rigorous process in identifying green and social assets eligible for funding,” said Armi M. Lamberte, Head of Sustainable Finance and First Vice President of RCBC.

Lesson 4: Strengthening transparency and trust

Sustainability bond issuers are required to disclose the use of the bond proceeds and how various sustainable financing instruments were deployed to support sustainable finance principles. “Thus, the transparency that came with these reporting requirements gives our stakeholders confidence that they are placing their money in a bank that shares their values or sense of responsibility when it comes to protecting the environment and enabling sustainable communities,” Ms. Lamberte explained.

Lesson 5: Enlarging the ecosystem

The growing demand for sustainable finance has prompted regulators and market participants to develop a uniform response such as reporting standards and banking regulations. Through its green and sustainability bond issuances, RCBC helped establish an early support for the BSP in the development of BSP Circular 1085 which mandates lenders to include environmental and social considerations in their governance frameworks, risk management systems, strategies and operations. RCBC’s green bond issuances were also instrumental in the government’s early adoption of the guidelines on green bond issuances under the ASEAN Green Bonds Standards. This enables the government to position the Philippines as an ideal destination for sustainable investment, given the country’s established renewable energy industry and significant infrastructure demand.

“A year after our milestone bond issuances, we have realized the enormous influence the financial services sector has in making a significant difference in society and the environment. As one of the leading universal banks in the Philippines, RCBC believes in doing its part by going beyond paying lip service,” said Mr. Claudio.


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