Societe Generale (SocGen), the largest bank in France by total assets, successfully issued its first tokenized green bond on November 30. The security token on the Ethereum public blockchain was registered by SG-Forge, a regulated subsidiary of the French bank.
The First for Society General
The digital green bond is valued at €10 million with a 3-year maturity, according to SocGen’s press release. The green bond’s proceeds will be used to finance or refinance companies and products classified under “Eligible Green Activities” by the bank’s Sustainable and Positive Impact Bond framework.
AXA Investment Managers and Generali Investments, through a private placement, were the two major institutional investors that subscribed to the digital bond. AXA notably utilized EUR CoinVertible, SocGen’s euro-based stablecoin, as a settlement mechanism for the instrument.
Key Innovations Unlocked by the Tokenized Green Bond
For Society General, the digital bond unlocks two key innovations in blockchain as well as Environmental, Social, and Governance (ESG), including:
- 24/7 access to the data linked to the carbon footprint embedded in the smart contract. This provides transparency to the “issuers and investors in measuring the carbon emissions of their securities on the financial infrastructure.”
- Providing an option to settle securities on-chain using SG-Forge’s EUR CoinVertible stablecoin. SocGen also clarified that it’s experimenting with offering Central Bank Digital Currency (CBDC) as an alternative for settlement.
The first foray of SocGen in security tokens aims to augment the bank’s debt capital market offerings tailored for corporate and institutional clients while keeping its ESG commitments in check.
“The issuance of this bond demonstrates Societe Generale’s commitment to drawing on its financial structuring expertise and on SG-FORGE’s technologic capabilities to contribute to building an innovative sustainable bond market,” said SocGen.
Eligible Green Categories
SocGen’s Positive Impact Bonds are classified into three based on their intended purposes. These issuances can be applied to finance or refinance green, social, and sustainability efforts.
Eligible clients in the “Green Categories” are those engaged in the following:
- Renewable energy
- Green buildings
- Low carbon transport
- Water management and water treatment
- Pollution prevention and control
- Circular economy
Excluded in the eligibility criteria are businesses engaged in weapons, munitions, tobacco, gambling, alcohol, nuclear power, radioactive materials, fossil fuels, logging, and others listed in the bank’s Positive Impact Bonds guidelines.
SG-Forge is the arm of Societe Generale in providing digital assets structuring, issuance, exchange, and custody services.