ING has issued the world’s first sustainability improvement derivative (SID) for SBM Offshore, a supplier to the offshore energy industry.
The SID is an interest rate swap that hedges the interest rate risk of the construction of one of SBM Offshore’s Floating Production Storage and Offloading facilities. It’s the world’s first derivative with a price linked to the company’s sustainability performance, next to trading risk, capital requirements and profit. The credit spread of the SID can increase or decrease based on SBM Offshore’s ESG performance, as scored by Sustainalytics, an independent provider of ESG research and ratings.
The SID is the second sustainability financial product launched by ING following the 2017 issue of a sustainability improvement loan.