As of February 2019, Reykjavik Energy is considering issuing their first Green Bond, which would be the third Green Bond coming from an Icelandic organization. With a potential value between ISK 2.5 and ISK 3 billion ($20 million to $25 million) and a 35-year term, the company is thinking not only about the financial implications of its proposed financing but also how it fits into its Environment, Societal and Governance (ESG) framework and its pursuit of the United Nations 17 Sustainable Development Goals. Finally, it must also consider its unique Ownership Strategy, which lays out the relationship between its owners (three Icelandic municipalities including the City of Reykjavik), management and its stakeholders. The Ownership Strategy had been credited with being a crucial factor in the company's resuscitation from near bankruptcy only five years earlier.
As of February 2019, Reykjavik Energy is considering issuing their first Green Bond, which would be the third Green Bond coming from an Icelandic organization. With a potential value between ISK 2.5 and ISK 3 billion ($20 million to $25 million) and a 35-year term, the company is thinking not only about the financial implications of its proposed financing but also how it fits into its Environment, Societal and Governance (ESG) framework and its pursuit of the United Nations 17 Sustainable Development Goals. Finally, it must also consider its unique Ownership Strategy, which lays out the relationship between its owners (three Icelandic municipalities including the City of Reykjavik), management and its stakeholders. The Ownership Strategy had been credited with being a crucial factor in the company's resuscitation from near bankruptcy only five years earlier.
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Year: 2019
Geographic Setting: Islandia
Learning Objective
This case can be used in an undergraduate, graduate or executive program in sustainability, governance, finance, strategic management or courses focused on energy.
The objective is for students to be introduced to the ESG (Environmental, Social and Governance) framework and specifically learn about the concept of an Ownership Strategy within the "Governance" pillar. Additionally, the case provides background on Green Bond issuance at a strategic level. Instructors have the option of emphasizing either ESG, Governance or the Green Bond depending on the course.
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