Bapco Energies, the integrated energy company leading the energy transition in Bahrain, has become the world’s first national energy company to publish its Sustainability-Linked Finance Framework.
The Framework was developed in close collaboration with Standard Chartered, which acted as the company’s ESG (Environmental, Social and Governance) advisor in the process, said a statement from Bapco Energies.
The Framework will allow Bapco Energies to link its financing with decarbonization goals in line with Bahrain’s commitment to sustainability and climate action as pledged by His Royal Highness Prince Salman bin Hamad Al Khalifa, the Crown Prince and Prime Minister of the Kingdom of Bahrain, at COP26.
As part of the Framework, Bapco Energies has disclosed detailed Scope 3 absolute emissions targets.
Unlike Scope 1 and 2 emissions which are related directly to the operations of Bapco Energies, Scope 3 refers to emissions that the company is indirectly responsible for - a measure that is critical in the fight against climate change.
Under the Framework, Bapco Energies will be able to tap into the emerging ESG investor and lender base in a robust and transparent manner, said the statement from the Bahraini company.
With Standard Chartered’s support, the Framework received a Second Party Opinion from ISS confirming its alignment with the ICMA Sustainability-Linked Bond Principles (SLBP) and the LMA Sustainability-Linked Loan Principles (SLLP), it stated.
Group CEO Mark Thomas said: "We are proud to have published our Sustainability-Linked Finance Framework and Second Party Opinion from ISS. Disclosing our detailed and ambitious decarbonization targets, makes us the first national energy company to implement this practice setting a global benchmark in the energy sector."
In the Framework, Bapco Energies lists its Scope 1 and 2 net emissions intensity reduction targets, using 2017 as a baseline: 15% by 2025, 25% by 2030, 50% by 2040, 75% by 2050; and by 2060, reaching net zero Scope 1 and 2 emissions.
The Bahraini energy giant said it is committed to reducing absolute Scope 1 and 2 emissions by 30% from 2017 levels by 2035. For its landmark Scope 3 targets, Bapco Energies will reduce absolute Scope 3 emissions within the kingdom by 30% from 2017 levels by 2035; and by 2060, reach Net-Zero Scope 3 emissions.
"Transparency in sharing these targets allows us to play our part in addressing the global climate crisis more effectively, and we are committed to actively contributing to global and local sustainability agendas. This announcement underlines our commitment to deliver a commercially viable energy transition to support the Kingdom's efforts of achieving Net-Zero by 2060," stated Thomas.
Dr Boutros Klink, Standard Chartered CEO, Bahrain and Middle East (excluding the UAE) said: "We are delighted to have built on our longstanding relationship with Bapco Energies and our support for the kingdom’s ambitions by creating its Sustainability-Linked Finance Framework, which is testament to our market-leading sustainable finance capabilities."
"We are proud to have been part of Bahrain’s economic growth for the last 100 years and hope to continue to be for the next 100 years and beyond," he stated.
"We commend Bapco Energies for its undertaking of this Framework and for leading the way among national energy companies in setting ambitious emission reduction targets that will contribute to efforts that seek to mitigate climate change. At Standard Chartered, we are committed to supporting our clients across our dynamic footprint as they venture into the sustainable finance market to meet their ESG ambitions," he added.
