On November 30, 2023, Société Générale issued its first digital green bond in the form of a “ Security Token ” directly recorded by SG-FORGE on the Ethereum blockchain with transparency and traceability of ESG data.
The tokens were fully subscribed “by two leading institutional investors, AXA Investment Managers and Generali Investments, through a private placement.”
This transaction is the first digital green bond “issued by Société Générale relying on the differentiating functionalities of the blockchain.” This natively digital format makes it possible to “increase transparency and traceability but also the fluidity and speed of transactions and their settlements.”
This inaugural operation is structured in “the form of a senior preferred unsecured bond in the amount of 10 million euros with a maturity of 3 years.”
The funds raised will be exclusively used to finance or refinance eligible green activities, as defined in the “Sustainable and Positive Impact Bonds framework” of Société Générale [2] . The Société Générale Group has “been a recurring issuer of positive impact bonds since its inaugural issue in 2015.”
This is also a first step in the use of blockchain as “a data repository and certification tool to promote transparency of ESG and impact data on a global scale, for the benefit of issuers and investors alike.”
This digital green bond issuance “includes two key innovations” that will continue to be developed:
Information on the carbon footprint linked to the bond’s digital infrastructure is freely available 24 hours a day, 7 days a week directly in the bond’s “ smart contract ”.
This allows issuers and investors to “measure the carbon emissions of their securities on the financial infrastructure.” This innovation is a new service offered by SG-FORGE and follows the publication of its first report on the carbon footprint of the complete life cycle of “ Security Tokens ”.
A new option is offered to investors to “settle securities on-chain via EUR CoinVertible, the digital asset issued by SG-FORGE in April 2023 , in addition to traditional cash settlement solutions . While central bank digital currencies (CBDC) solutions are currently being piloted, these innovative settlement methods demonstrate SG-FORGE’s ability to provide a full range of on-chain services.”
This operation is a new illustration of “the innovative services developed by Société Générale on digital securities. It also contributes to enriching the Group’s capabilities in debt capital markets in order to meet the demand of issuer and institutional clients for digital assets integrating ESG considerations.”
The issuance of this bond demonstrates Société Générale’s desire “to rely on its expertise in financial structuring and the technological capabilities of SG-FORGE to contribute to the construction of an innovative sustainable bond market.”
As noted in the update, Société Générale-FORGE (SG-FORGE) is a regulated subsidiary of the Société Générale group, “approved as an investment firm and authorized to provide MiFID 2 investment services under the supervision of ACPR. The subsidiary is registered as a digital asset service provider (PSAN) with the AMF. SG-FORGE provides digital asset structuring, issuance, exchange and custody services.”
