From green bond pioneer to EuGB issuer: Insights from NRW.BANK
Following the recent listing of NRW.BANK's inaugural European Green Bond (EuGB) on LuxSE, we sat down with NRW.BANK’s Chairwoman of the Managing Board Gabriela Pantring and Head of Investor Relations, ESG & Credit Research Christian Hardt to get their insights on the motivations behind this milestone transaction, investor appetite for the new label, and the bank’s broader sustainability ambitions.
We were able to show that many of the loans provided through our promotional programmes could be aligned with the EU Taxonomy - something, we were initially rather sceptical about. So, after extensive preparatory work, we updated our Green Bond Framework and established a dedicated EuGB Factsheet, which allows us to issue green bonds fully aligned with the EuGBS.
In developing the Factsheet, we recognized that it was possible to meet the EU Taxonomy across various activities, resulting in a Factsheet contributing to four environmental objectives via 21 eligible economic activities, these strongly focus on energy, transport, environmental protection and restoration, as well as water supply and sewage.
This step not only expands our presence in the sustainable bond market but also serves as an example for other issuers, sending a clear market signal of our commitment to sustainable finance and EU climate policy objectives. At the same time, it is a future-proofing exercise, as this is not just a funding transaction but also a capability-building initiative, strengthening our taxonomy expertise and further developing our internal processes and reporting systems.
It is important to add that we will continue to issue green bonds under our recently updated Green Bond Framework, which is aligned with the ICMA Green Bond Principles.
How does NRW.BANK plan to measure and communicate the environmental impact of the projects financed under
Christian Hardt: We plan to continue to measure and communicate the environmental impact of projects financed with our Green Bonds. This holds also true for our EuGBs We do this with support from the scientific institute, the Wuppertal Institute, and the Emschergenossenschaft, all of which bring high levels of expertise and with whom we have a well-established working relationship. These experts apply rigorous methodologies in line with current market practices and integrate the requirements of the EuGBS as well as the ICMA Green Bond Principles. While impact measurement is complex, this approach ensures that independent expert knowledge is fully incorporated into the assessment of the financed projects. We will report on the environmental outcomes annually, with impact reporting carried out in a coordinated way across both our EuGBs and ICMA-aligned Green Bonds, ensuring transparent and consistent communication of our sustainable financing activities.
With this step, we underline not only our continued ambition to remain a key shaper in the green bond market but also demonstrate that important investments in North Rhine-Westphalia can meet the stringent requirements of the EU Taxonomy, particularly because these activities are already supported by comprehensive German and North Rhine-Westphalian legislation that incorporates environmental and social aspects.
For other SSAs considering a similar step, we would recommend starting with a thorough, content-driven analysis of the underlying projects and ensuring strong alignment with their own strategic and future business development. Equally important is establishing a robust link between legislation and the EU Taxonomy.
A clear decision-making process, followed by consistent but well-considered implementation, is essential to successfully bring such a framework to market.
The LGX listing also requires compliance with strict admission criteria, including alignment with the ICMA Green Bond Principles, external verification, and ongoing reporting commitments. For us, this visibility on LGX represents an additional layer of transparency and reliability. It reinforces investor confidence in the robustness of our sustainable financing frameworks.
Our target is to achieve climate neutrality across all three pillars of our business - promotional business, capital markets business, and banking operations - by 2045, in line with the Paris Climate Agreement. Examples include sector guidelines under the ESG Promotion Requirements and the Implied Temperature Rise (ITR) metric, which aligns our corporate portfolio with the 1.5°C target, and promotes investments in companies with credible transition strategies. Currently NRW.BANK is developing a Climate Transition Plan for our promotional and capital markets business, including interim targets and measures.
But the nature of transformation itself is also changing. Today, we ask ourselves what is needed overall to secure a sustainable future for Europe. Since the wars in Ukraine and Iran, we have been discussing transformation not only in terms of climate neutrality and digitalization but also in terms of resilience. Resilience is Europe’s new currency and the guiding theme for the years ahead. Promotional banks finance the infrastructure, technology, and innovative strength that safeguard Europe’s resilience.
NRW.BANK has issued 17 green bonds since 2013. What led NRW.BANK to issue its first green bond under the European Green Bond (EuGB) Standard?
Gabriela Pantring: In fact, we have issued 17 green bonds since 2013, and in May of this year, we launched our first "European Green Bond" in accordance with the European Green Bond Standard (EuGBS). We took this step to align our eligible sustainable financing activities with the highest market standards.We were able to show that many of the loans provided through our promotional programmes could be aligned with the EU Taxonomy - something, we were initially rather sceptical about. So, after extensive preparatory work, we updated our Green Bond Framework and established a dedicated EuGB Factsheet, which allows us to issue green bonds fully aligned with the EuGBS.
In developing the Factsheet, we recognized that it was possible to meet the EU Taxonomy across various activities, resulting in a Factsheet contributing to four environmental objectives via 21 eligible economic activities, these strongly focus on energy, transport, environmental protection and restoration, as well as water supply and sewage.
This step not only expands our presence in the sustainable bond market but also serves as an example for other issuers, sending a clear market signal of our commitment to sustainable finance and EU climate policy objectives. At the same time, it is a future-proofing exercise, as this is not just a funding transaction but also a capability-building initiative, strengthening our taxonomy expertise and further developing our internal processes and reporting systems.
It is important to add that we will continue to issue green bonds under our recently updated Green Bond Framework, which is aligned with the ICMA Green Bond Principles.
How does NRW.BANK plan to measure and communicate the environmental impact of the projects financed under
this Factsheet?
Christian Hardt: We plan to continue to measure and communicate the environmental impact of projects financed with our Green Bonds. This holds also true for our EuGBs We do this with support from the scientific institute, the Wuppertal Institute, and the Emschergenossenschaft, all of which bring high levels of expertise and with whom we have a well-established working relationship. These experts apply rigorous methodologies in line with current market practices and integrate the requirements of the EuGBS as well as the ICMA Green Bond Principles. While impact measurement is complex, this approach ensures that independent expert knowledge is fully incorporated into the assessment of the financed projects. We will report on the environmental outcomes annually, with impact reporting carried out in a coordinated way across both our EuGBs and ICMA-aligned Green Bonds, ensuring transparent and consistent communication of our sustainable financing activities.NRW.BANK’s EuGB was twice oversubscribed. What did you observe from investor response during the order book process?
Christian Hardt: Our first European Green Bond was the largest green bond NRW.BANK has ever issued, totaling EUR 1.5 billion—an exceptionally large volume made possible by the strong development of our promotional lending with positive environmental impact, particularly in the renewable energy sector. The order book was twice oversubscribed, reflecting an overwhelmingly positive response from investors. Demand showed little price sensitivity, with strong interest from high-quality, especially sustainability-oriented investors. Over time, we have built long-term, stable relationships with ESG investors, and as both the investor base and the sustainable bond market have evolved, we have developed alongside them. The final allocation also demonstrated a very broad and diverse investor base, particularly in terms of geography, underlining wide international interest and confidence in our sustainable financing approach. Compared with our conventional bond issuances, the additional ESG focused investor demand came primarily from investors based in the Nordics, Benelux region, France and Southern Europe. This additional demand and a generally lower price sensitivity for our Green Bonds is a major benefit of this product, especially in times of volatile markets.As one of the first SSAs globally and the first in Germany to issue a EuGB, what would you recommend to other SSAs considering doing the same?
Christian Hardt: From our experience, the journey towards issuing a European Green Bond was long and intensive, but ultimately very worthwhile. The integration of the EU Taxonomy as a harmonised classification system for sustainable investments, as well as compliance with the EuGBS, significantly increases transparency for investors.With this step, we underline not only our continued ambition to remain a key shaper in the green bond market but also demonstrate that important investments in North Rhine-Westphalia can meet the stringent requirements of the EU Taxonomy, particularly because these activities are already supported by comprehensive German and North Rhine-Westphalian legislation that incorporates environmental and social aspects.
For other SSAs considering a similar step, we would recommend starting with a thorough, content-driven analysis of the underlying projects and ensuring strong alignment with their own strategic and future business development. Equally important is establishing a robust link between legislation and the EU Taxonomy.
A clear decision-making process, followed by consistent but well-considered implementation, is essential to successfully bring such a framework to market.
What led NRW.BANK to list this EuGB on LuxSE, and what does its display on the Luxembourg Green Exchange (LGX) represent for you?
Christian Hardt: We have been listing all our green bonds on the Luxembourg Green Exchange (LGX) since its inception in 2016. Listing the EuGB on the LGX was therefore a natural continuation of our established practice. Being displayed on a dedicated green exchange underlines the quality and credibility of our green bond concept as well as our project selection approach.The LGX listing also requires compliance with strict admission criteria, including alignment with the ICMA Green Bond Principles, external verification, and ongoing reporting commitments. For us, this visibility on LGX represents an additional layer of transparency and reliability. It reinforces investor confidence in the robustness of our sustainable financing frameworks.
What actions and initiatives is NRW.Bank pursuing to achieve its 2045 climate-neutrality goals?
Gabriela Pantring: The state of North Rhine-Westphalia aims to become the first climate-neutral industrial state. NRW.BANK supports this transformation with its programs.Our target is to achieve climate neutrality across all three pillars of our business - promotional business, capital markets business, and banking operations - by 2045, in line with the Paris Climate Agreement. Examples include sector guidelines under the ESG Promotion Requirements and the Implied Temperature Rise (ITR) metric, which aligns our corporate portfolio with the 1.5°C target, and promotes investments in companies with credible transition strategies. Currently NRW.BANK is developing a Climate Transition Plan for our promotional and capital markets business, including interim targets and measures.
But the nature of transformation itself is also changing. Today, we ask ourselves what is needed overall to secure a sustainable future for Europe. Since the wars in Ukraine and Iran, we have been discussing transformation not only in terms of climate neutrality and digitalization but also in terms of resilience. Resilience is Europe’s new currency and the guiding theme for the years ahead. Promotional banks finance the infrastructure, technology, and innovative strength that safeguard Europe’s resilience.
