To determine the appropriate level of hybrid bond issuance for Veolia Environnement, we must evaluate the company's current financial position, its future funding needs, and the role hybrids play in optimizing its capital structure within the constraints of S&P Global Ratings' methodology.

1. **Current Financial Position & Leverage Metrics:**
   - As of Dec 31, 2022, Veolia's reported Debt (Financial Liabilities) stands at roughly €27.8 billion (€19.69B non-current + €6.52B current + €0.213B overdrafts + €1.656B lease liabilities). 
   - Total Equity is €14.87 billion.
   - Existing Hybrids ("Titres Super Subordonnes"): €3.496 billion.
   - Adjusted Debt = Reported Debt + Hybrids = ~€31.3 billion.
   - Total Adjusted Capital = Adjusted Debt + Equity = ~€46.2 billion.
   - Currently, hybrids represent approximately 7.5% of total adjusted capital (3.496 / 46.2), which is exactly half of the S&P 15% cap.

2. **Recent M&A and Integration (The Suez Acquisition):**
   - The 2022 balance sheet reflects the massive integration of Suez, which drove Goodwill from €6.2B to €11.6B and significantly expanded the asset base (Assets grew from €53B to €73.3B). 
   - This acquisition was substantially funded by debt and equity (including a capital increase and the contribution of Suez's own hybrid debt into Veolia's equity). 

3. **Future Needs and Refinancing:**
   - Cash flow from financing activities shows massive repayment activities in 2022 (-€10.17B), indicating an aggressive deleveraging posture post-acquisition.
   - While Net Finance Costs remain high (€837M), Veolia generated strong operating cash flows (€4.148B) in 2022, supporting its ability to organically delever.
   - The company has moderate, ongoing capex needs (~€2.78B in 2022) but no "transformational" M&A pipeline on the horizon comparable to the Suez deal. 

4. **Rating Rationale & Cost of Debt:**
   - Veolia is currently in the BBB range (Investment Grade). Post-Suez, the leverage metrics were highly strained. The existing €3.5B hybrid issuance has been critical in providing "equity credit" to stabilize adjusted leverage metrics and protect the IG rating during the heavy acquisition phase.
   - Issuing further hybrids up to the 15% cap (an additional ~€3.5B) is not strictly necessary because the transformational M&A risk has passed, and the company is in a net repayment/deleveraging cycle. 
   - However, the cost of hybrid debt for a BBB-rated utility is generally manageable, and maintaining a buffer near the 7.5% mark provides meaningful rating flexibility against unforeseen macroeconomic or regulatory shocks without incurring the excessive step-up costs associated with maxing out the 15% cap. Given the guidelines, an 11.25% or 15% issuance would require "very high refinancing needs" or "material downgrade risk," which Veolia is successfully navigating away from. Moving slightly higher from the exact 7.5% provides slight optimization, but staying near the 7.5% mark reflects "moderate refinancing needs" and that "hybrid issuance meaningfully improves adjusted leverage metrics."

5. **S&P Cap Constraints:**
   - The S&P cap limits equity credit to 15% of total adjusted capital. Veolia currently utilizes ~7.5%. Issuing an additional tranche to optimize leverage modestly without aggressively increasing the cost of debt aligns best with the 7.5% threshold. 

Veolia has already utilized hybrids to the 7.5% level to secure its balance sheet through the Suez acquisition. It does not have the extraordinary capex or M&A needs that would justify pushing to the 15% limit, nor is its rating so pressured that maxing out hybrids is required to preserve investment grade. However, keeping the hybrid stack at this meaningful 7.5% level is optimal for leverage optimization and provides essential rating headroom.

<answer>7.5%</answer>