The Forensic Carbon Accountant: Snam SpA SLB

10 minute read

Snam, an Italian gas transport and storage company, has issued several ESG-labelled bonds, including in Feb 2024 its fourth Sustainability-Linked Bond using an updated framework. The bond was praised for including a target linked to Scope 3 emissions.

The recent SLB builds on earlier issuance, however due to a re-baselining, the target is for Scope 1 + 2 emissions is less ambitious. It does include a target for Scope 3 emissions, but only the nine categories that are currently reported.

Snam’s Scope 3 emissions reporting does not include the emissions from its transported gas. Guidance from CDP is clear that even for companies that do not own the product, the “throughput method” should be used to calculate emissions under Category 11 “Use of Sold Product”.

The current market pricing suggests investors are assigning value to the step-up options on Snam’s legacy 10y SLB, which is tighter than an equivalent vanilla bond. The new bond, with the Scope 3 target, due to its wider spread may offer value to investors.

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