Concordia University has launched a sustainable bond, with the aim of financing its share of the university’s new science hub while generating environmental and social benefits as defined by the United Nations Sustainable Development Goals.
The issuance amounts to $25-million worth of debt at just over 3.6 per cent, functioning as a 20-year senior unsecured bond.
The bond is the first sustainable bond issued by a university in Canada, while at the same time being the first sustainable bond of that duration issued by any institution in Canada.
The federal government is also helping to fund the science hub to the tune of $20.6 million, along with the $16.1 million coming from the government of Quebec, adding to the capital raised by the bonds.
“Concordia has a mandate to promote and develop sustainability within its activities, it’s investment, management and research missions and financing,” says Denis Cossette, chief financial officer of Concordia.
The hub will feature labs for researchers in the fields of aquatic biology, microscopy, cellular imaging, nanoscience and bioprocessing. It will also house the university’s new chemical and material engineering program.
“The activity that we will conduct within the building, our scientific activities, complies with some of the objectives of the United Nations Principles of Responsible Investment,” says Cossette.
The bonds were also vetted by Vigeo Eiris, an ethical and responsible investment research firm. It gave the opinion that the actives Concordia enacts with the capital raised by the bonds are likely to contribute to three of United Nations’ Sustainable Development Goals, namely affordable and clean energy, industry innovation and climate action.
Increasing demand from institutional investors for sustainable fixed income assets did play into the choice to issue the bonds, indeed the issuance was oversubscribed by over 40 per cent, says Cossette. However taking action on sustainability is in the university’s DNA, he adds.
“We issued the bonds last week and the demand was high,” he adds. “The attraction of sustainable bonds is evident, that’s why we’ve been able to issue a 20-year bond duration, which is a first in Canada for sustainable bonds.”