Equitable Holdings builds on its mission with first ESG financing

Inaugural issuance shows how financial services firms are applying ESG solutions to evolve their organisations.

Equitable Holdings (EQH) recently announced its inaugural $500 million sustainable financing issuance, highlighting how financial services companies in the US and globally are increasingly using sustainability-linked financing solutions to advance their environmental, social, governance (ESG) commitments and drive positive change for all stakeholders.

The five-year sustainable funding agreement-backed notes (FABN), issued by Equitable Financial Life Global Funding, will fund green and social projects aligned with the company’s sustainability priorities such as Global Stewardship, Responsible Investing and Climate Change Strategy.

BNP Paribas served as active joint bookrunner on the sustainable FABN transaction, the latest milestone in a partnership with the company that includes EQH’s first-ever FABN issuance in 2020.

Connecting Purpose to Positive Change

The holding company for Equitable Life and global investment manager Alliance Bernstein, Equitable Holdings’ mission of helping people to achieve financial wellness provides it with a strong ESG foundation. The company is an engaged participant in global sustainability initiatives, with Alliance Bernstein among the earliest asset management firms to sign the United Nations Principles for Responsible Investment (PRI).

This perspective that financial wellness is connected to a sustainable future is embedded in the company’s Sustainable Financing Framework, which is aligned with ICMA principles. Under the Framework, Equitable includes seven categories for environmental and social projects for use of proceeds, including investments related to Green Buildings, Renewable Energy, Energy Efficiency, Sustainable Water and Wastewater Management, Clean Transportation, Access to Essential Services (Healthcare and Education) and Affordable Housing.

“As an organization committed to helping people secure their financial well-being so they can pursue long and fulfilling lives, the mission of Equitable Holdings is inherently grounded in a strong sustainability and ESG foundation. This issuance under Equitable’s Sustainable Financing Framework furthers the company’s commitment to being a force for good and driving positive environmental and social change while positively impacting all of the stakeholders we serve,” said Robin Raju, Equitable’s Chief Financial Officer, in a press release.

The Framework also reflects the growth of social targets to address under-served communities, including investments in increased access to healthcare and education for low- to moderate-income geographies, Black, Brown, and Latinx communities, persons with disabilities, and rural populations.

EQH will update investors annually regarding the allocation of proceeds via a public report on its investor relations website.

ESG Takes Root in the Insurance Sector

Sustainable finance has quickly gained traction with insurance in 2021, with firms in the US and globally launching new frameworks and bond issuances.

“Clients in the life insurance and annuity space are quickly determining that ESG and sustainable finance practices are in the best interests of their policyholders and other stakeholders,” said Hampton Smith, Managing Director, Financial Institutions Coverage, BNP Paribas Americas. “As this momentum continues across the industry, we expect ESG and sustainability themes to broaden from financing and investing activities to product development and strategic initiatives.”

Clients in the life insurance and annuity space are quickly determining that ESG and sustainable finance practices are in the best interests of their policyholders and other stakeholders.

Hampton Smith, Managing Director, Financial Institutions Coverage, BNP Paribas Americas

Equitable Holdings is the second US insurance company to launch a sustainable FABN this year. California-based Pacific Life issued its inaugural $800 million, five-year sustainable FABN offering in April, which represented that company’s largest bond offering in over 10 years. BNP Paribas acted as active joint bookrunner on the transaction. Through its sustainable bond framework, Pacific Life will allocate proceeds to eligible environmental and social projects across a number of categories – including aquatic biodiversity projects in keeping with its well-known “whale” branding.

Hervé Duteil, Chief Sustainability Officer Americas at BNP Paribas, recently appeared on Pacific Life’s “Wave Strength” podcast to discuss trends in ESG and sustainable finance; click here to listen.

In Europe, French insurance giant AXA followed the publication of its new Sustainability Bond Framework by issuing a €1bn Subordinated Green Bond in April. BNP Paribas was joint green structuring advisor, joint global coordinator, joint lead manager, as well as issuing and paying agent.

This material is for informational purposes only and is not intended to be a complete and full description of the products of BNP Paribas and its affiliates or the risks they involve. Additional information is available upon request. Neither the information nor any opinion contained in this material constitutes a recommendation, solicitation or offer by BNP Paribas or its affiliates to buy or sell any security, futures contract, options contract, derivative instrument, financial instrument, or service, nor shall it be deemed to provide investment, tax, legal, accounting or other advice. All opinions, information, and estimates in this material constitute BNP Paribas’ or its affiliate’s judgment as of the date of this material. This material is only intended to generate discussions regarding particular instruments and financing and/or investments opportunities and is subject to change, or may be discontinued, without notice. This material should neither be regarded as comprehensive nor sufficient for making financing and/or investment decisions, nor should it be used in place of professional advice. You should consult your own advisors about any products or services described herein in order to evaluate the merits, suitability, and financial, legal, regulatory, accounting and tax issues raised by any investment and should not rely on BNP Paribas or its affiliates for this. Information contained herein is derived from sources generally believed to be reliable, but no warranty is made that such information is accurate, complete or fair and should not be relied on as such. The offer and sale of securities to institutional investors may only be made through the U.S. registered broker dealer and futures commission merchant entity, BNP Paribas Securities Corp.

Suggested reading