In choosing the companies in which to invest, socially responsible investors (SRI) are always more often making use of specific analyses developed by one or more sustainability rating agencies, such as the EIRIS - Expert In Responsible Investment Solutions.
These ethical rating agencies provide the SRIs with performance benchmarks in areas such as, for example: Environment, Community relations, Human resource management, Business ethics and conduct, Stakeholder engagement, Human rights, Supply chain control
The ratings are drafted on the basis of public information and questionnaires sent to the companies, at times with a request to access company documents. Corporate transparency in communicating ESG performances (Environmental, Social, Governance) is therefore an essential requirement for being part of the companies in which SRIs wish to invest. In some cases the rating is expressed through a summary indicator.
Terna’s strategic orientation to combining sustainability and growth has been put into practice
with the launch of the Group's first green bond, destined for institutional investors.
The bond has a value of € 750 million and a duration of 5 years and, as indicated in the “Green Bond Framework”, its
net proceeds will be used to finance Terna’s “eligible green projects” already identified or to be identified in
accordance with the “Green Bond Principles 2018” published by the
ICMA – International Capital Market Association.
The Green Bond Framework was audited by VIGEO-EIRIS, an independent company which issued the Second Party Opinion.
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|BLOOMBERG GENDER EQUALITY INDEX
||An international index that measures companies' performance regarding gender equality issues and the quality and transparency of their public reporting. Terna was included for the first time in January 2019.
|DOW JONES SUSTAINABILITY INDEX
||The DJSI indices select the companies with the best sustainability performances from among those with the highest capitalisation (the top 300 out of 2,500 companies around the world for the World Index) based on assessments carried out by the agency, RobecoSAM. This index is deemed to be the most reliable by the "Rate the raters" survey conducted by GlobeSCAN SustainAbility among a group of around 700 qualified sustainability experts representing 70 countries. Terna has been included in the DJSI World Index since 2009.
||This index was created by ECPI - an Italian agency founded in 1997 which specialises in ratings, sustainability indices and research to incorporate non-financial information into investment processes - based on its own analysis of European companies' sustainability performances. Terna has been included since 2007.
|ETHIBEL SUSTAINABILITY INDEX (ESI)
||The indices are calculated on the basis of ratings produced by Vigeo, which, as an initial population, include the approximately 10,000 ratings that are contained in the Russell Global Index. Inclusion is subject to the positive opinion of the Ethibel Forum, a panel of independent experts on the various aspects of sustainability. Terna has been included in the ESI since 2009.
||Developed by the Vigeo rating agency, these indices are based on a population of companies listed in North American, Asian and European markets and included in the STOXX® 1800 list. Vigeo's ESG indices are drawn up on the basis of a methodology including over 330 indicators and 38 sustainability criteria. Terna has been included in the World 120, Eurozone 120 and Europe 120 lists since 2012, the year in which they were introduced.
||Introduced in 2010, these are the sole sustainability indices comprising a selection of companies listed only on the Italian Stock Exchange, based on analysis by the company, ECPI. Terna has been included in the FTSE ECPI since 2010.
||The FTSE4Good indices group together the best companies in terms of sustainability performance based on analyses carried out by Evalueserve. The index is reviewed twice a year, in March and September. Terna has been in the index (Global and Europe lists) without interruption since 2005.
|MSCI GLOBAL SRI GLOBAL SUSTAINABILITY
||MSCI has integrated the original KLD indices - among the first to track companies' non-financial performance, and which are still one of the most accredited benchmarks in the United States - with other sustainability indices. Terna's has been continuously included since 2007.
||Launched in 2011, these indices are based on assessments made by the Sustainalytics rating agency, and select the best shares in terms of ESG performance (around 350) from the 1,800 in the STOXX® Global general index. Admission to the Global ESG Leaders Index, requires inclusion in at least one of the three specialist indices (Global Environmental Leaders, Global Social Leaders and Global Governance Leaders). Terna is the only Italian utility company to be included in all three of them. Terna has been included in the index since 2011.
|STOXX® LOW CARBON
||Launched in February 2016, the STOXX® Low Carbon Indices aim to provide a selection of companies with low CO2 emissions. The selection of companies is based on data gathered by the CDP (Carbon Disclosure Project). The components of the indices are selected from the STOXX ® Global 1800 list based on their carbon intensity (Scope 1 and Scope 2 of the GHG Protocol), based on the ratio of emissions to revenue.
|UNITED NATIONS GLOBAL COMPACT (“GC100”)
||Established in 2013 by the United Nations Global Compact in collaboration with the research company, Sustainalytics, this index encompasses the 100 companies that have distinguished themselves at global level, in terms of both their attention to sustainability issues and their financial performance, and which comply with the ten fundamental United Nations principles regarding human rights, labour, the environment and efforts to combat corruption. Terna has been included in the index since 2013.
In September, on the occasion of the annual review conducted by the Swiss sustainability rating agency, RobecoSAM, Terna's presence in the Dow Jones Sustainability Index (World and Europe) was confirmed, and the Company was named Industry Leader in the Electric Utilities sector. In February 2019, this result led to the inclusion of Terna - the only electric utility in the world to receive such an honour - in the Gold Class of RobecoSAM's Sustainability Yearbook 2019, an international reference publication for corporate sustainability issues and performance.
Terna is the world's Electric Utilities “Industry Leader” in the Dow Jones Sustainability Index
Based on assessments carried out by RobecoSAM, the Swiss sustainability rating agency, which each year decides on inclusion in the Dow Jones Sustainability Index, Terna was ranked number one in the world ("Industry Leader") in the Electric Utilities sector for its sustainability performance.
Confirmed for the 10th consecutive year in the index, Terna achieved an overall score of 91/100, the highest ever for the Company and the highest in the electric utilities industry (sector average: 46/100), improving its 2017 figure by 4 points. The first place was confirmed by 9 of the 23 assessment criteria applicable to the Company. Terna came first in the economic criteria for Materiality, Risk and Crisis Management, and Policy Influence; in the environmental criteria for Environmental Reporting, Operational Eco-efficiency, and Transmission and Distribution; and in the social criteria for Social Reporting, Human Capital Development, Corporate Citizenship and Philanthropy.
In 2018, RobecoSAM updated its methodology by revising the scoring process compared to previous Media and Stakeholder Analysis (MSA) assessments, thereby responding to investors' growing interest in monitoring and analysing any disputes involving the companies evaluated.
In January 2019, Terna - the only Italian electricity company - was included for the first time in the Bloomberg Gender Equality Index (GEI), an international index that measures companies' performance regarding gender equality issues and the quality and transparency of their public reporting. Bloomberg analysed over 9,000 companies listed on leading world financial markets, including only 230 of them in the GEI index (in total, there are three Italian companies), from 36 countries and representing 10 different sectors (including energy, industry, utilities and finance).
Terna takes out a line of credit linked to sustainability indices
In September 2018, Terna took out a line of credit (ESG linked Revolving Credit Facility back-up) linked to sustainability indices, totalling €900 million with a pool of banks consisting of Banca IMI, Banco BPM, BNP Paribas and UniCredit (the amount was subsequently increased to €1,150 million in November as the transaction was extended to involve Mediobanca - Banca di Credito Finanziario).
After the issue of the first Green Bond in July, this new revolving credit facility, the first of its kind for Terna, introduced elements of sustainability via an incentive-based mechanism linked to the achievement of specific environmental, social and governance objectives ("ESG"), including in the annual assessment carried out by RobecoSAM in relation to inclusion in the Dow Jones Sustainability Index.
The transaction confirms the Group's strong commitment to introducing a model aimed at consolidating sustainability as a strategic lever for the creation of value for all its stakeholders.