Sustainable FinancingRegions recognizes the role financial institutions play in the transition to a lower-carbon economy. Our customers depend on us to provide opportunities they are interested in pursuing related to this transition. In the past several years, we have seen growth in sustainable lending and asset management and expect to see more in coming years.
Renewable Energy Lending
Regions supports the development and implementation of clean energy solutions through our Solar Power Finance Team and Energy and Natural Resources Group (ENRG). The Solar Power Finance team at Regions supports the development and implementation of clean energy solutions for our Corporate Banking clients. Since 2016, Regions has provided lease financing for utility scale and commercial photovoltaic (PV) solar projects across the U.S. By arranging financing for these projects, a portion of the traditional power supply is offset by carbon-free generation. This financing has funded 53 solar projects that generate 480 megawatts of capacity, which is sold to universities, local school districts, corporations, U.S. military bases, utilities, and electric cooperatives.
In 2019, we provided $198 million in funding for 13 individual PV solar projects located in Georgia, Mississippi, North Carolina and Tennessee. These ground-mounted PV solar farms developed in rural areas provided an overall generating capacity exceeding 110 megawatts.
ENRG specializes in tailored financing products and services for renewable energy projects. Our offerings include advisory and financing services to energy companies in conjunction with mergers and acquisitions, as well as issuances of bonds. The ENRG works closely with the Solar Power Finance team and Commodities team to raise capital for renewable energy clients with solutions ranging from highly structured project finance to standard financing offerings.
In 2019, ENRG committed or closed over $80 million in construction or revolving financing for solar PV projects or solar independent power producers. Additionally, Regions participated in raising $600 million in a green bond issuance for a leading utility company. As our platform continues to grow, we expect to continue to increase our advisory and capital markets assignments, as well as permanent debt, in 2020.
Responsible Asset Management
Regions’ Asset Management business group provides individuals and institutions with products and services to help them manage and grow their assets. Synergies in how Asset Management and their internal partners are leveraging technology and working to meet growing investor demands for ESG investing are helping Regions expand the solutions we can offer to grow relationships and meet client needs. To that end, Asset Management expanded its lineup of recommended offerings for clients in 2018 to include four ESG-focused products: two equity and two fixed income products.
In 2019, Regions experienced a 437 percent year-over-year growth in client assets allocated to these four ESG-focused products. While this high growth rate may be due to the newness of the products, this growth also highlights that our customers are interested in the ESG-related, socially responsible and impact-focused investment opportunities we provide. Education of investors will continue to be a focus area to ensure potential and current investors are fully aware of details that may impact return and results, such as the methodology used to construct funding indexes.
On a broader basis, we employ an environmentally enhanced due diligence approach to collateral pledged for loans, which reinforces our commitment to adhere to federal and state environmental laws and regulations.
Sustainable Forestry
The Natural Resources and Real Estate (NRRE) Group within Wealth Management manages natural resources properties held in trusts, estates and agency accounts. Relying on a staff of more than 40 natural resource professionals and registered foresters, Regions is responsible for the sustainable management of approximately 1 million acres of timberland across 15 states. As one of only a few banks that directly manages land and timber for clients, Regions demonstrates a commitment to sustainability and forestry best practices. Some examples of this commitment include:
- Regions adheres to all applicable state Best Management Practices (BMPs) for Forestry that contribute to water quality, carbon sequestration and wildlife habitat protection.
- A portion of the timberland acres managed by Regions’ foresters is certified under the 2015-2019 Sustainable Forestry Initiative Standard or the 2015-2020 American Tree Farm Certification Standard. Both third-party certification systems promote sustainable forestry practices aimed at protecting water quality, biodiversity, wildlife habitat, species at risk and forests with exceptional conservation value.
- Regions NRRE staff also includes property managers who are certified farm managers responsible for the oversight and management of more than 200,000 acres of farmland across the footprint. A majority of Regions’ farm tenants utilize advanced technologies and equipment in their farming practices known as “precision agriculture,” which maximizes crop yields while minimizing the use of pesticides, fertilizers and water.