Societe Generale, a prominent French bank, has successfully issued its first digital green bond on the Ethereum blockchain. The bond, with a term of three years and a value of 10 million euros, was privately raised by two distinguished institutional investors, AXA Investment Managers and Generali Investments.
Ethereum Blockchain Integration
According to the press release, the milestone event took place on November 30, 2023, with Societe Generale utilizing blockchain technology through SG-FORGE to register the bond as a security token on the Ethereum public blockchain. This strategic move aims to enhance transparency and traceability, particularly regarding Environmental, Social, and Governance (ESG) data.
The fully subscribed security tokens represent a significant leap for Societe Generale in leveraging blockchain functionalities. The digital format facilitates transparency and traceability and streamlines transactions and settlements, offering improved fluidity and speed.
The issuance, structured as a 10 million euro senior preferred unsecured bond with a maturity of three years, adheres to Societe Generale’s Sustainable and Positive Impact Bond framework. The net proceeds from the bond will be exclusively allocated to finance or refinance Eligible Green Activities, in line with the bank’s commitment to sustainability.
Societe Generale has been a trailblazer in the realm of Positive Impact Bonds since its inaugural issuance in 2015. This latest move represents a significant step towards using blockchain as a data repository and certification tool for issuers and investors, enhancing transparency on a global scale.
The digital green bond on the Ethereum blockchain introduces two key innovations. Firstly, information on the carbon footprint linked to the bond infrastructure is accessible 24/7 through the bond’s smart contract. This pioneering feature empowers issuers and investors to measure the carbon emissions associated with their securities, aligning with Societe Generale’s commitment to sustainability.
Secondly, investors now have the option to settle securities on-chain using the EUR CoinVertible, a digital asset issued by SG-FORGE in April 2023. This novel settlement method and traditional cash settlement solutions highlight Societe Generale’s versatility in providing a full spectrum of on-chain services.
This transaction showcases Societe Generale’s commitment to innovation and enriches the bank’s debt capital markets capabilities. By meeting the increasing demand for digital assets with ESG considerations, Societe Generale positions itself as a frontrunner in developing an innovative and sustainable bond market.
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