Despite the political world’s best attempts, the earth is still spinning and issuing green bonds.

Meantime, the message coming from Morocco is, now more than ever, government and private sector action will need to step up between now and COP23 in Bonn on matching NDCs with climate finance.

Onwards to the Climate Bonds target of USD 1trn in green bonds by 2020!  

And onto the bonds…

Spotlight on Morocco

MASEN Solar Certified Climate Bond: A first for Morocco! 1.15bn dirhams (USD 100m) issuance.

Last week we blogged about a first for Morocco – a Certified Climate Bond to finance solar power projects issued by the Moroccan Agency for Solar Energy (MASEN).

Here’s are a few extra details:

State guarantee: the bond was underwritten by a state guarantee. This allowed MASEN to ensure an optimised interest cost involving just 10bp risk premium. A great example of government support for a nascent African green bond market!

Private Placement: Following the authorization of the Moroccan Authority of Capital Markets (AMMC) the bond issue was completed through private placement to: Al Barid Bank, Attijariwafa Bank, La Caisse Marocaine des Retraites and La Société Centrale de Réassurance.

Clean energy target: The solar projects are contributing to Morocco’s target of 52% clean energy by 2030.

This is the first bond verified under the Climate Bonds Standard by Vigeo Eiris.

According to Bloomberg, Saudi Arabian renewables developer Acwa Power International and China’s Chint Group Corp Ltd were chosen to build the 170 MW of solar projects: the Noor Ouarzazate IV project will have a maximum capacity of 70 MW, Noor Laayoune will have 80 MW and Noor Boujdour will have 20 MW.

The projects will be partly financed by Germany’s development bank KfW which will provide 60 million euros.

Al Huffington Post has some further information in French here.

Bank Al-Magrhib buys USD 100m green bond from IBRD

The Central Bank of Morocco, Bank Al-Maghrib, has purchased 3-year green bonds issued by the International Bank of Reconstruction & Development (IBRD) arm of the World Bank as part of its reserves management program.

Reuters Africa reports that this is its first purchase of this kind of debt product.

We think the statement by Mr. Abdellatif Jouahri, Governor of Bank Al-Maghrib tells the overall story:

"Having become increasingly aware of the effects of climate change at the COP22 in Marrakesh, countries are now specifying how to achieve commitments made in Paris. Bank Al-Maghrib's investment in World Bank Green Bonds has been made in this context. The investment will support sustainable development projects financed by the World Bank, including in countries in Africa."

The World Bank’s wider green bond program received a second opinion from CICERO.

Underwriter: Credit Agricole CIB.

L’AMMC a récemment publié un guide sur les ‘‘Green Bonds’’ au Maroc
(The AMMC has just released a Green Bonds guide for Morocco)

The full guide (in French) has been published by the Moroccan Capital Markets Authority (AMMC), with the support of the IFC. Its target audience includes issuers, investors and financial professionals.

The guide aims to facilitate the development of the green sector in Moroccan capital markets, by offering a clear overview of the green bond issuance process, identifying main requirements and best practices as well as clarifying key stakeholders’ roles.

Credit Agricole Morocco’s inaugural MAD 500m green bond closed as well as BMCE Bank of Africa’s inaugural MAD 500m green bond.

It’s a very exciting time for Morocco and Africa; we’ll keep you updated on these in our next blog!

Certified Climate Bonds

We covered MASEN’s Certified Bond above.

India: Renew Power’s Climate Bonds Certified wind private placement (INR 5bn, USD 75m)

Renew Power’s INR 5bn, 5 year tenor, green private placement in August 2016 was recently awarded Climate Bonds Certification for its 90 MW wind refinancing projects in central India.

One of our newest verifiers, Emergent Ventures India (EVI), undertook the verification report.

Mutual funds purchased the entire issue, a Bloomberg source wrote.

The green bonds will refinance debt bearing about 11 percent interest from Kotak Mahindra Bank Ltd. That funding helped ReNew Power build wind projects that were commissioned in March in Dhar and Ujjain districts in the central Indian state of Madhya Pradesh.

ReNew Power has almost 1 GW of solar and wind power in operation with another under construction.

Corporate Bonds

Bank of China break new ground again – this time with a USD 500m ‘dual recourse’ green bond

Foreshadowed by us on 14^th September, here is something we haven’t seen much of  before. The Bank of China (BoC) formally announced last week the issuance of a new type of green bond, a ‘dual recourse’ bond.  

It’s not an entirely new structure, as it is similar to a covered bond (such as Berlin Hyp’s green covered bond/ pfandbrief). The concept is simple – it means that the bond is backed by the issuer’s balance sheet.

But that’s not all…

If the issuer goes bankrupt, the bondholder can also make claims over the assets in a defined ‘cover pool’ of assets. This gives investors an additional safety net and the bond an enhanced credit rating.

In the case of this bond, the cover pool is not mortgages (as in Berlin Hyp) but climate-aligned bonds that are part of the newly launched China Bond China Climate Aligned Index, compiled by China Central Depository & Clearing Co. Ltd (CCDC), China Energy Conservation & Environment Protection (CECEP) and the Climate Bonds Initiative. More info here.

Proceeds of the bond will be used to finance:

• Renewable energy: solar, wind, biomass
• Pollution prevention: wastewater treatment, recycling and waste-to-energy
• Clean transportation: rolling stock vehicles including electric, hybrid and multi-modal transport
• Sustainable water management

The offer was 1.8 times oversubscribed and bought by investors in the US and Asia.

EY provided the external review here and the bond was listed on the London Stock Exchange.

Underwriters: Bank of China, Barclays, China Construction Bank, Citi, Credit Agricole, HSBC, Merrill Lynch, Societe Generale, Standard Chartered 

Another first out of China!

Bank of America issues third green bond for USD 1bn and expands lending program

Bank of America has just announced their third green bond, which at USD1bn, is also their largest to date.

The proceeds will be used to finance energy efficiency and renewable energy projects under the bank’s ‘environmental business initiative’. This has been increased from USD 50bn to USD 125bn in low-carbon business by 2025.

For examples of previous projects funded by BoA green bonds, see here.

Bank of America is also a leader in our green bond underwriter league tables.  

Bravo BoA – keep pushing!

Underwriter: Bank of America Merrill Lynch

Credit Agricole's INR 65m green Uridashi bond

Credit Agricole (CA) issued an INR denominated green bond for Uridashi investors (Japanese retail investors) as part of its green notes program.

Proceeds go to:

• green real estate
• renewable energy
• mass transportation
• waste and water
• energy efficiency
• sustainable agriculture & forestry

Sustainalytics have provided a second opinion here.

Also in case you missed it – CA recently announced that it will stop financing new coal-fired power plants or extensions. This extends its May 2015 commitment to stop financing coal mines.

The French text is here.  

Amongst French banks, Societe Generale (SG) has made a similar announcement, BNP Paribas and Natixis have also restricted exposure to coal.  

In addition, CA, SG & BNP Paribas have joined eight other international banks in ruling out finance to the giant Carmichael Mine project in Australia and other coal developments in Queensland’s Galilee Basin.

Whoa now there’s a double call to action – other banks, will you follow?!!

Rikshem's new SEK 500m green bond out (USD 54m)

Swedish real estate company Rikshem came to the market again this week with a SEK 500m, 6 year bond listed on the Stockholm Stock Exchange. Rikshem is a regular issuer of green bonds, having come to the market five times since 2014 and a total issuance of over USD 250m green debt.

Use of proceeds will target green property renovation projects. Under the Rikshem Green Bond Framework, eligible assets include renovated and/or properties under renovation compliant with a minimum target of 40% in energy savings. CICERO provided a review of the framework.

Lead manager: Handelsbanken Capital Markets.

Fabege receives Green Loan Differential Pricing from Danske Bank

According to Fabege’s press release and reported by Environmental Finance, this Sweden-based repeat green bond issuer has received a preferential borrowing rate from its green lender Danske Bank.

The ‘improved terms’ are essentially made possible because the green loan is financing lower risk green buildings.

The loan has a total value of SEK 1.6bn (USD 171.9m) and is made up of two parts, with its green element financing BREEAM environmentally certified properties.

This is fantastic news and could be a game-changer for increasing flows of finance for green buildings, we hope to see quality green loans attracting lower rates.

We are happy to note that Danske Bank is a Climate Bonds Partner.

Bonds not yet aligned with international definitions and best practice

Industrial Bank RMB 20bn (USD 2.9bn)

The China based Industrial Bank has issued its third whopper of the year with a RMB 20bn (USD 2.9bn) 5-year green bond.

Proceeds will be directed to a number of project types including:

• energy saving
• clean transportation
• pollution prevention and control
• resource conservation and recycling
• clean energy

As with the other green bonds, this one won’t be included in our numbers due to the potential inclusion of clean coal.

As regular Market Blog readers will recall, the People’s Bank of China’s Green Project Catalogue, released in December 2015, includes some tricky areas such as ‘clean coal.’ From an international perspective, any investments that will extend the life of a coal plants (including clean coal) is not included in the definition of green.

This is based on a 2-degrees trajectory which shows that existing plants need to be retired and new generation coal plant development needs to be wound down as quickly as possible for a global transition to a low carbon economy.

As we have mentioned before, clean coal is important in the local context as the replacement of old coal plants with modern generators reduces short term air pollution in Chinese cities – an incredibly important issue for Chinese people and investors.

Underwriter: Industrial and Commercial Bank of China

Yunnan Provincial Energy Investment private placement of RMB 500m (USD 72.5m)

According to Reuters China, this is the first green Principal Protected Note (PPN) from a Chinese issuer. However, as it’s a private placement, we can’t see any details on the use of proceeds.

Although Yunnan Provincial Energy Investment Co. Ltd. is involved in the investment and management of energy and energy related industries, such as environmental protection and new energy, it principally engages in the investment and management of energy, natural gas, and coal energy.

Therefore, we need to see more disclosure on the use of proceeds to include this in our database.

Underwriter: Shanghai Pudong Development Bank

GEM Co. Ltd. issued RMB 500m (USD 72.5m)

GEM Co. Ltd is China’s first listed company in the WEEE (Waste Electrical and Electronic Equipment) recycling industry.

Use of proceeds:

• RMB 400m will be used to remanufacture cobalt and nickel as well as other materials from recycled batteries, and to build up a waste water management system
• RMB 100m will be used for general daily operations

20% of the proceeds will go to general operations - this is a bit tricky as the proceeds cannot be linked to green infrastructure and tracked.

This means we can’t include in our data but we applaud this first from GEM and hope to see more bonds linked to recycling projects.

Underwriter: China Development Bank Securities

RMB 1.09bn (USD 158m) from Beijing SPC Environmental Protection Tech Co. Ltd

Beijing SPC Environmental Protection Tech Co. Ltd issued an RMB 1.09bn (USD 158m) labelled green bond and the allocation of proceeds is disclosed as:

• RMB 330m will be used for waste heat recovery and heat supply projects;
• RMB 220m will be used for air pollution prevention;
• RMB 540m will be used for daily operations.

Almost half of the proceeds will be used for daily operations which means again we can’t include this one.   Furthermore, we note that while waste heat recovery falls within the CBI Climate Bonds Taxonomy, general heat supply projects are not.

Underwriter: Tianfeng Securities

Municipal Bonds

City of Decatur, Georgia: dredging project (USD 22.2m)

The City of Decatur just jumped into the green bond market with this interesting USD 22m bond.

Proceeds will be used to expand the City’s water supply by the dredging of the 11 square kilometres Lake Decatur formed from the damming of the Sangamon River in 1922. The goal of the project is to increase the capacity of Lake Decatur by 30 percent and thereby increase the number of days of available water supply in the event of a drought.

This is an interesting one – dredging is not something that has come up in the green bond market before so guidelines are unclear. While having negligible climate impacts, dredging is associated with local environmental issues relating to biodiversity and ecosystems which are often associated with marine environments.

This is also interesting because it is an example of an adaptation project that may have adverse impacts on the local environment. For instance, dredging of river systems is a recurrent national debate in countries such as the UK which are suffering from increased frequency, intensity and unpredictable floods.

Dredging can have adverse impacts on water courses and ecosystems and has implications for planned and unplanned flood plains. More information is available here.

The bond is included in our numbers but it’s flagged as a potential issue in the future.

Underwriter: Raymond James

Green bond from City of Tamarac, Florida(USD 22m)

Proceeds will go to improving the city’s sewer system.

Underwriter: RBC Capital Markets

LA Sanitation District green bond (USD 170.3m)

Proceeds of the bonds will be used to refinance improvements to the sewage system of the county.

Underwriters: BofA Merrill Lynch and RBC Capital Markets

Development Banks

Development Bank of Japan SRI bond (USD 500m)

Development Bank of Japan just issued its second Sustainability bond. The bond will finance and refinance loans that:

1. Meet its green building certification programme – 3, 4 or 5 stars

Buildings (i) are certified after undergoing an assessment which is intended to ensure that the construction takes into account environmental considerations.

Additionally, it ensures that the buildings take other responsible factors into account:

• Disaster prevention and anti-crime measures
• Tenants’ comfort and convenience
• Harmony with the surrounding environment
• Collaboration with stakeholders (including tenants and investors)
• Environmental Investor Relations activities

2. Meet environmentally-rated loan program eligibility criteria – A, B or C rating

The Environmentally-rated loan program incorporates environmental ratings into its lending products by evaluating the environmental management of its clients.

Companies are rated from A – D based on general management, business activities and environmental performance. Companies rated A or B receive discounted interest rates:

• A = Companies with excellent advanced environmental initiatives
• B = Companies with advanced environmental initiatives
• C = Companies with sufficient environmental initiatives

There is a great deal of detail and rigour that has been put into the selection process, which is great. We do, however, note three areas for improvement:

1) The criteria are a bit of a black box so it is difficult to understand what would qualify as ‘excellent’ and how this might compare to other certification schemes.

2) We are unsure from the disclosure if the buildings criteria take energy metrics into account, which is a critical part of the ‘green’ in green building – ‘tenant comfort’ while important, is not material to the environmental impact of the building.

3) The Environmentally-rated loan program focuses entirely on the entity that it is financing rather than the asset it is financing which is inconsistent with how the green bond market is generally regarded, that is, focused on the greenness of assets rather than entities.

The framework was reviewed by Sustainalytics here.

The transaction was placed with SRI investors including AP2 (Second Swedish National Pension Fund), Fukoku Mutual Life Insurance Company & Meiji Yasuda Life Insurance Company.

The Development Bank of Japan is 100% government-owned financial institution devoted to regional development, environmental conservation, social infrastructure and technology.

Underwriters: Goldman Sachs, BoA Merrill Lynch, Daiwa, Morgan Stanley

NRW.BANK Green Bond EUR 500m

German development bank NRW.BANK issued its 4th green bond this week, with a 10 year tenor.

The bond is listed in Düsseldorf and, for the first time, also at the newly launched Green Exchange of the Luxembourg Stock Exchange (LGX). The majority of the investors came from Germany, France, the Netherlands and Asia and many of them have a clear focus on sustainability.

Proceeds will finance:

• Renewable energy projects such as onshore wind power (almost 100 wind turbines), offshore wind power (two wind turbines) and photovoltaic installations (3,700 kWp)
• Energy efficiency projects such as brownfield manufacturing facilities and public buildings
• Low carbon transport
• Sustainable water management projects such as river restoration, flood management and sewer construction

NRW.BANK was an early pioneer in the green bond market issuing its inaugural green bond in November 2013 and committed in May 2016 to a minimum of one green bond issuance each year.

Underwriters: Bank of America Merrill Lynch and DZ Bank

Other thematic products

‘First of its kind’ forest bond from the IFC USD 152m

The International Financial Corporation has just issued the world’s first Forest bond. The bond is not labelled as green and proceeds will finance the IFC’s normal development projects.

The Forest bond aspect to it is named because investors in the bond have a choice - they can opt to be paid their coupon in carbon credits or cash. Those who opt to receive credits can either use them to cover emissions or sell them on the carbon credits market.

The carbon credits will come from the Kasigau Corridor REDD project in Kenya, run by Wildlife Works.

The project covers 500,000 acres of dryland forest in the corridor between Tsavo East and Tsavo West National Parks in Taita Taveta.

BHP Billiton, one of the world’s largest resources companies, then provides a price-support mechanism so that if investors elect the cash coupon instead of the carbon credit coupon, BHP Billiton offtakes the carbon credits generated and delivered by the Kasigau Corridor REDD project.

The bond was sold to major global institutional investors - including CalSTRS, Treehouse Investments LLC, TIAA-CREF, and QBE.

The IFC said the bond had been intended to be half the size, but was increased because of demand.

It’s not labelled as green so we will not comment in detail, only to note that the deal has attracted some questions.

Netherlands BNG USD 600m Socially Responsible Investment bond

BNG Bank has just issued a USD 600m SRI bond, promoting best in class of sustainable municipalities in the Netherlands. See more here. The detailed framework for the bond received a review from Sustainalytics.

UK energy supplier Ecotricity launches EcoBond

The retail bond is Ecotricity’s 4th Ecobond. Proceeds will go to renewable energy infrastructure in the UK.

Caja Rural de Navarra debut EUR Sustainable Covered Bond

Spanish based Caja Rural de Navarra has issued the first sustainable covered bond of the year - a EUR 500m 7 year covered sustainable bond.

It is fully compliant with the 2016 Green Bond Principles as well as the Social Bond Guidance. Proceeds will finance projects that are in line with the bank’s sustainability principles (such as renewable energy, waste management, and education).

Review provided by Sustainalytics. SRI investors accounted for 30% of the deal.

Gossip and News Bites

China’s Bank of Communications has been approved by PBOC to issue RMB 70bn (USD 10.1bn) of green bonds by the end of 2017, reports Xinhua.

Tongling Dajiang Investment Holdings has been approved by the National Development and Revolution Commission (NDRC) to issue RMB 1.5bn of green bonds. Proceeds will be used to finance recycling facilities and sponge city projects in Tongling, a prefecture-level municipality with 75k population in south Anhui province.

This will be the first green bond issued by a China’s LGFV (Local Government Financing Vehicles).

Hebei Financial Leasing Co. Ltd. has been approved by PBoC to issue RMB 2bn (USD 290m) green bonds on the China interbank market. This will be the first green bond issued by a financial leasing company in China.

China's Three Gorges Corporation will issue its second RMB 4bn (USD 580m) green bond with two tranches. We have covered our concerns with this project in a previous blog.

Bank of Qingdao will issue another green bond at RMB 4bn (USD 580m) soon.

California is seeking independent third party verification for all future muni bonds.

Nigeria released guidelines for their initial sovereign green bond issuance programmed for early 2017. The Climate Bonds Initiative is acting in an advisory role. Speaking at a COP22 press briefing, Environment Minister Amina J Mohammed has confirmed Nigeria’s intention to issue sovereign green bonds in 2017.

Read more about it here and here.

Climate Bonds Initiative fellow Soren Elbech to become Treasurer of Asian Infrastructure Investment Bank (AIIB) on December 7^th.

China and France’s Ministries of Finance have completed the fourth China-France High Level Economic and Financial Dialogue (HED) in Paris. Of specific interest to Blog readers in the Communique is the commitments to climate action and green finance commitments:

• Promoting cooperation amongst PBOC, Bank of France, EUROPLACE, NAFMII and Green Finance Committee on green finance issues. 
• Promoting cooperation between China and France on green bonds market development, supporting green bonds issuance in both countries. 

Go to Part 2, Clauses 17-24 in the English version fact sheet or read the Chinese version here.

Paris Europlace mise sur la finance verte pour briller face à Londres.

BNP Paribas roadshow for an EUR 500m green bond to start on Nov 21 – see more here.

It is being reported that they plan to issue a EUR 500m in renewable energy green bonds as early as this week.

Green Climate Fund is 'considering issuing green bonds.'

Australian listed property giantInvestacommits to zero carbon target by 2040 across its USD 10bn office portfolio and business operations.

This is a great step by Investa and an early boost for the Climate Bonds Low Carbon Buildings target of zero emissions from property by 2050.

Scottish financier sets out the case for community investment in green energy bond in Scotland.

India’s Energy Efficiency Services Limited (EESL), one of the largest efficiency based companies in the world, foreshadows plans to raise USD 100m via green bonds.

CALSTERS green bond program’s 7-year birthday!

COP22 Special Report

Meanwhile in Marrakesh, our CEO has been called the ‘rockstar’ of green bonds and had a more colourful description of his ‘global peregrinations’ in this blog post here.

Check out his address to the High Level Ministerial Dialogue on Climate Finance Plenary 2 here.

Proceedings really warm up at around 2.53.20. Take the ten minutes.

November Graph

If you’ve made it all the way to the end of the blog your reward is our latest graph.

Note the 2016 growth in energy efficiency/low carbon buildings, low carbon transport and water management.

‘Till next time,

The Markets Team

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments that any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

A week to go - places limited!

The Climate Bonds Initiative warmly invites you to the Executive Dialogue Session of the 'Brazil's New Economy' Investor Roadshow. Taking place in the grandeur of the City of London’s Guildhall, this is not to be missed by ​institutional investors, emerging markets / fixed interest specialists and asset managers seeking opportunities in Brazilian green bonds and green financing.

When: December 8
Where: Guildhall, London
Full agenda: Download here
RSVP:Here

The Investment Potential of Brazil’s New Economy 
As ​the ​world’s third largest emerging economy, Brazil is one of the UK’s biggest trade and investment opportunities. It also requires an estimated USD 152bn of investments to meet its UN climate change treaty commitments.

Green investment opportunities include: low-carbon u​rban mobility; water and sanitation; logistics infrastructure; renewable energy; and an expansion of sustainable agribusiness. 

Speakers at the Executive Dialogue Session include:
•      Executives from Brazil’s largest financiers and project developers, including BNDES, Suzano, Ecoagro, CPFL Energia and Klabin.
•      Senior officials from Brazil’s public sectors, including the Ministry of Foreign Affairs and Ministry of Agriculture.
•      UK representatives from Government Ministers and Sir Roger Gifford, former City of London Lord Mayor and head of the City’s Green Finance Initiative.

Programme 

Companies Present

Brazil’s Development Bank
Pioneer in Sustainable Forestry
Leader in Agriculture Securitization
Standard-Setter in Pulp & Paper
​Head of the Renewables Sector

Please RSVP at http://goo.gl/o2gVXW - Spaces are limited.

Sponsored by:	Supported by:	In association with:

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

New issuance from pulp and paper leader on eve of Brazil's New Economy: Green Finance and Green Bonds event in London

Suzano Pulp & Paper has issued the very first green bond in Brazilian Real, following up on their successful USD 500m green issuance in July this year.

The BRL 1bn (USD 294m) green securitization, locally known as a ‘CRA’ (Agribusiness Receivables Certificates), was issued on Friday by Eco Securitizadora, and backed by 100% export credit receivables from Suzano.  

The bond has an 8 years maturity and 96% of CDI interest rate, and according to Marcelo Bacci, CFO at Suzano“is the lowest yield ever in a ‘CRA’ in the local markets, which is mostly due to its green characteristics”.

Per the announcement, proceeds from the transaction will be invested by Suzano in projects that feature positive environmental attributes and foster sustainable development.

An independent auditor will monitor the use of proceeds and we’ll keep you up to date as additional information becomes available. At this stage we would expect projects to be in alignment with Suzano’s long-time sustainable strategies in forestry.

Brazil's 3rd GB

This is the third green bond from Brazil, food giant BFR led off in May 2015 with a EUR 500m (USD 549m) BBB-rated bond attracting more than 50% European buyers.

To learn more about the potential of green finance in Brazil, check our state of the market report Bonds & Climate Change 2016: Brazilian Edition, launched in August.

Brazil’s New Economy Event - London 8^th December - Guildhall

We’ll write more about this new bond soon, as we will be hearing about it straight from Suzano themselves. They are coming to London next week for our 'Investor Roadshow for Brazil’s New Economy', on the 8^th of December at the Guildhall.

If you’re a London-based ​institutional investor, emerging markets or fixed interest specialist, or asset manager seeking opportunities in green bonds and Brazilian green financing developments, this event is not to be missed.

More details and an RSVP here.

Spotlight on Suzano

Suzano Papel & Celulose SA is the second largest eucalyptus pulp producer in the world, and the first company in the world to be listed on the Chicago Climate Exchange (CCX) to trade carbon credits arising from planted forests.

It was honoured by the Rainforest Alliance in 2009 as a Corporate Sustainability Standard-Setter (companies that exhibited outstanding leadership in efforts to promote sustainability) and its projects are certified by the Forest Stewardship Council (FSC).

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments that any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

As today's Novethic^* annual responsible investment conference has an agenda chock full of calls to asset owners, discussions on green bonds and the Sustainable Development Goals (SDGs), we thought it was time to review some of the leading markers France has laid down in the last few years to advance green finance.

Here’s some of our favourites:

1. France has been a pioneer in the green bond market and the source of many firsts, including the first municipal green bond by Île-de-France in 2012. Île-de-France has continued to lead with multiple green bond issuances and won a Climate Bonds Green Bond Pioneer Award in 2016.

   The Climate Bonds State of the Market Report 2016 identified France as the 2nd largest country of issuance for labelled green bonds (with USD 15.8bn outstanding) and the largest issuer in Europe.

   
    
2. With the passage of the French Energy Transition Law and in particular Article 173, in effect since 1 January 2016, they were the first nation to introduce mandatory climate and carbon risk reporting from institutional investors, pension funds and insurance companies.

    

3. The September 2015 announcement of the “Energy and Ecological Transition for the Climate” Label (TEEC).  The English version of Decree No 2015-1615 dated 10 December 2015 is here.

    

4. The Paris Cop21 Conference and Agreement of November 2015.

    

5. The November 2015 decision during COP21 by the Ministère de l’Environnement de l’Energie et de la Mer to become a Climate Bonds Partner, the only government ministry anywhere in the world to take such a step.

    

6. The July 2016 TEEC announcements and the decision to incorporate the Climate Bonds Taxonomy in the underlying TEEC definitions for green bonds.

    

7. The September 2016 announcement that France would issue up to EUR 9bn of sovereign green bonds for three years from 2017.

   France is the first nation to make such a financial commitment following President Hollande’s foreshadowing of the move in April 2016. 

   
    
8. The appointment of our Climate Bonds Director of Investor Outreach & Partners Programme Manuel Adamini to one of the four ‘colleges’ that make up the twenty-person Committee of the  Energy and Ecological Transition for the Climate Label, charged with oversight of certification and standards under the Label and recommendations to the Minister.

    

9. The October 2016 EUR 900m (USD 982m) Climate Bonds Certified issuance by rail transport giant SNCF Réseau to fund rail upgrades.

    

10. The November China/ France agreementas part of the latestHigh Level Economic and Financial Dialogue. Note the commitments to climate action and green finance, including promoting cooperation between China and France on green bonds market development and supporting green bonds issuance in both countries. 

This Blog Post has grown in the drafting, space limitations mean we’ve left out many steps being taken by French banks, asset managers and pension funds.

And…

While we’re very proud at the appointment of a Climate Bonds Director to such a position from the TEEC Committee, we believe it must be seen in context of the global climate leadership France has displayed for some time now.

Vive la France!

‘Till next time,

Climate Bonds Communications

*We note that Novethic is a member of the Climate Bonds Initiative Partners Programme

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments that any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

2016 is coming to an end... but it's not over just yet (!) and our Climate Bonds team will be hard at work this month just like any other.

Bali, Paris, Rotterdam, London, Mumbai & of course the leader in green bonds issuance, China - Datong City, Beijing & Hong Kong. 

We will be present in 8 different cities & 2 continents all before the Holidays are upon us! Take a look... 

December Events

Next event blog will be in 2017!

'Till then,

Communications Team

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

​

Join one of our twin webinars on December 13th for a comprehensive overview of green bonds for cities in emerging markets, with a focus on the Mexican and Latin American markets.

Webinars: Bonos Verdes para Ciudades – Financiamiento de infraestructura de ciudades en economías emergentes: español e inglés, Dic 13 

Únase a uno de nuestros webinars el 13 de diciembre para aprender sobre bonos verdes para las ciudades en mercados emergentes, con enfoque en el mercado mexicano y latinoamericano.

The Challenge of Cities

The world’s cities host 50% of the global population and account for 70% of global greenhouse gas emissions.

The share of urban population is expected to rise to 60% by 2030, with the bulk of this growth to take place in emerging markets and developing countries.

An estimated USD 50 trillion will need to be spent over the next 15 years in basic urban infrastructure such as transport, building energy efficiency, telecommunications, water and waste infrastructure.

Access to low-cost capital at scale is critical for cities in developing countries to realize low-carbon infrastructure and climate-resilient growth. 

Green City Bonds

Following COP22 in Marrakech, green bonds are being highlighted as an investment option to assist local and central governments in bridging the climate finance gap and meeting their carbon reduction commitments. 

The Big Questions

What are green bonds? 

How do they work?  

How can a city in an emerging economy access green finance? 

What are the prospects in Mexican and LATAM cities?

Twin Sessions: Español and English Tuesday December 13th

Speakers will include:

• Diletta Giuliani – Climate Bonds Initiative
• Viola Lutz – South Pole Group
• Padraig Oliver – Climate Policy Initiative
• Eduardo Piquero and Alba Aguilar Priego - MexiCO2
• Martin Stadelmann – South Pole Group
• Hanna Vartto – South Pole Group

The webinars will cover:

• Recap - What is a green bond?
• Green bonds for cities guidelines
• Green bonds for cities toolkit
• Issuer experience
• Q&A

The Green Bonds for Cities Project

These webinars are part of the Green Bonds for Cities project sponsored by Climate-KIC, delivered by Climate Bonds Initiative in partnership with ICLEI - Local Governments for Sustainability, South Pole Group and Climate Policy Initiative. Other workstreams from this project include:

Guidelines and Green Bond Toolkit - Coming Soon

A green bond guidelines strategic paper and green bond toolkit will also be released on Tuesday 13th and will be available online.

Chinese Green Cities

A ‘Green City Bonds – China’ roundtable has also been held in Datong, China as part of the Datong International Seminar on Green Finance by SyntTao Green Finance and Dianyang Capital.

India Roundtable December 19th

An Indian roundtable will be held in Mumbai, India on December 19th to explore the challenges and opportunities of green municipal markets in India.

For more information about this event please contact Diletta Giuliani.

Mexico City Update

Climate Bonds Initiative has been working directly with the City of Mexico Climate Change department and local partners MexiCO2 to develop a green financing strategy for the city and support the issuance of its first green bond.

The City has announced a MXN 1 billion green bond issuance and identified public transport, water efficiency and wastewater management projects to include in the portfolio.

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

La 9^èmeédition du Colloque annuel sur l’investissement responsable de Novethic s’est tenu jeudi dernier dans la capitale française.

Et c’est sur un programme axé sur l’engagement despropriétaires d'actifs et une demi-journée riche en débats dédiés aux obligations vertes et aux objectifs de développement durable que nous avonsdécidé de passer en revue les temps forts que la France a offertsà la finance verteces dernières années.

Retour sur 10 évènements marquants que nous avons sélectionnés:

1. La France a été un pays précurseur d’émissions d’obligations vertes, et est à l’origine de nombreuses innovations en la matière, à l’image de la toute première émission mondiale d’une municipalité par l’Île-de-France en mars 2012.

La région a continué sa belle lancée avec de multiplesémissions d’obligations vertes et a obtenu le Climate Bonds Pioneer Award au début de cette année, un trophée récompensant des organisations pionnières, qui par leurs    actions ont notamment démontré le rôle des obligations vertes dans la transition écologique.

N’oublions  pas de mentionner la Ville Lumière. L’émission de l’emprunt obligataire climatique de 300 millions d’euros à la veille de la COP21 par la Mairie de Paris reste un moment inoubliable.

Le rapport Obligations et Changement Climatique: État du Marché en 2016 place la France au 2^ème rang mondial des pays en volume d’émissions labellisées vertes (15.8 milliards de dollars d’obligations en cours) et se positionne    comme chef de file en Europe.

2. La France est la première nation à avoir instauré des obligations d’information pour les institutions financières sur leur gestion des risques liés au climat ainsi que l’intégration de critères ESG dans leur politique d’investissement avec l’entrée en vigueur de l'Article 173 de la loi TEE (Transition Écologique et Énergétique) depuis le 1^er janvier 2016.

3. Le décret n^o 2015-1615 en date du 10 décembre 2015 relatif au label « Transition énergétique et écologique pour le climat » (label TEEC).

4. La COP21 et l’Accord de Paris qui s’en est suivi.

5. En novembre 2015, le Ministère de l’Environnement, de l’Énergie et de la Mer devient Partenaire de la Climate Bonds Initiative, le seul ministère de l’environnement à ce jour à avoir suivi cette initiative.

Nous aimerions également mentionner que le Secrétariat d’État à l’Économie (SECO) de la Confédération Suisse fut le tout premier ministère à rejoindre notre programme de partenariat en juin 2015.

6. Le travail en aval de la parution du décret n^o 2015-1615 et la décision d’intégrer la classification Climate Bonds dans le référentiel du label TEEC.

7. Le gouvernement français annonce en avril et confirme en septembre 2016 que la France lancera la première série d’obligations vertes souveraines au monde. Environ 3 milliards d’euros seront émis annuellement pendant trois ans dès le début de 2017.

8. La nomination de notre Directeur du Programme Partenaires & Responsable de la sensibilisation des investisseurs Manuel Adamini à l’un des quatre collèges qui composent le comité du label TEEC en qualité d’expert en gestion d’actifs financiers et certification.

Il facilitera notamment la révision et le développement du référentiel ainsi que le processus de labellisation.

9. L’émission en octobre 2016 par la SNCF Réseau de 900 millions d’euros en obligation verte certifiée Climate Bonds dont les fonds sont alloués à la modernisation et à l’extension d’infrastructures ferroviaires.

10. Le 4^ème dialogueéconomique et financier de haut niveau en novembre dernier a officialisé un nouveau partenariat franco-chinois afin de développer entre autres le marché des obligations vertes.  

De par la nature courte de ce blog, nous ne pourrons malheureusement élaborer sur les autres actions exemplaires des banques françaises, gestionnaires d’actifs et fonds de pension.

Le mot de la fin…

Nous sommes fiers de la nomination de l’un de nos directeurs à un tel poste au sein du comité du label TEEC car celle-ci s’inscrit dans le rôle prééminent en termes de lutte contre le changement climatique auquel la France nous a habitué depuis quelque temps déjà.

A bientôt !

L’ÉquipeCommunicationde la Climate Bonds Initiative. 

 *On notera que Novethic est membre du programme Partenaires de la Climate Bonds Initiative.

Clause de non-responsabilité: L’information contenue dans cette publication ne constitue pas un conseil en investissement. La Climate Bonds Initiative n’est pas conseiller en placement et ne fait pas de « promotion financière ». Les liens de sites externes sont à titre d’information seulement. La Climate Bonds Initiative décline toute responsabilité quant au contenu de ces sites.

Une décision d’investissement est personnelle. La Climate Bonds Initiative décline toute responsabilité, quelle qu’en soit la nature, pour les investissements que quiconque fait, ainsi que pour des investissements effectués par des tiers.

What’s it all about?

US based NSF International is the most recent organization to be approved by the Climate Bonds Standard Advisory Board as a Verifier under the Climate Bonds Standard.

Established in 1944 at the University of Michigan, School of Public Health, NSF is a not-for-profit organisation respected for its scientific and technical expertise.

Accredited by the American National Standards Institute (ANSI), NSF has developed over 80 voluntary American National Standards under the scope of public health, safety, environment and sustainability assessment.

NSF International has been granted verifier status for North America for the following sector criteria: Solar, Wind, Water, Low Carbon Buildings and Low Carbon Transport.

What do verifiers do?

Verifiers play a vital role in the Climate Bonds Standards process. Issuers contract approved verifiers to perform environmental due–diligence on bonds they wish to be certified under the Climate Bonds Standard.

The verifier provides an independent assurance report to determine the eligibility of the bond against the Standard. The Climate Bonds Standard Advisory Board reviews this assurance report when it considers Certification of the bond.

The verifier list is growing

2016 has seen an upsurge of global organisations applying to become Verifiers against the Climate Bonds Standard, including China and India based companies. You can read about it in detail in our current Standards Newsletter.

Who’s saying what

Jenny Oorbeck, General Manager, NSF International Sustainability Division

"NSF International welcomes approval as a verification body by the Climate Bonds Standard Advisory Board. Verifying green bonds extends the scope of the NSF Sustainability Division’s greenhouse gas verification program.  It also supports the NSF International core mission of protecting and improving global public health by developing standards and providing certifications that help protect food safety, water quality, and the environment. NSF encourages everyone to live safer."

Sean Kidney, CEO of the Climate Bonds Initiative:

"We’re very pleased to announce that NSF International is the newest Approved Verifier. They’re widely recognized for their longstanding commitment to public health, safety, and protection of the environment and distinguished experience in external and independent assurance.”

Welcome aboard to NSF.

‘Till next time,

Climate Bonds Communications

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

Bancolombia has also become the first LATAM commercial bank to issue a green bond.

While much of the recent LATAM green finance focus has been on Brazil and Mexico, Colombia has stepped into the limelight with its first 350bn Peso (USD 115m) green bond from their largest commercial bank.

Bancolombia will use the proceeds from the issue to expand financial services for private sector investments that support addressing climate change. In particular, the issue will back renewable energy and sustainable buildings. We look forward to seeing additional use of proceeds information in the coming days.

The International Finance Corporation (IFC) was the sole investor in the bond.

By supporting green buildings and other climate-smart projects, the Bancolombia bond will help Colombia meet the challenge of reducing its carbon emissions by 20 percent by 2020. 

A second opinion has been provided by Deloitte and the underwriter is Banca de Inversión Bancolombia. 

Who’s saying what

Juan Carlos Mora,Bancolombia President:

'This bond is part of our corporate commitment to sustainability. We want to reduce our direct environmental footprint and encourage clients and partners to do the same by providing services and products that enable them to invest in areas like renewable energy and sustainable buildings. By doing this we continue to realize our aim of improving the lives of people and businesses by providing them with opportunities to enjoy a better future.' 

Carlos Leiria Pinto, IFC manager for the Andean Region:

'Addressing climate change is a priority for IFC, and green bonds are a powerful mechanism to channel investment for climate-smart investments. By investing in the first green bond issued by Bancolombia, we hope to pave the way for other issuers and investors and contribute to the development of the green bond market in Colombia.' 

A boost for GB development

Colombia has been one of our Climate Bonds priorities for LATAM throughout2016 and we’ve undertaken various engagements. We are now working with the Department on National Planning and other groups to lay the foundations for a domestic green bond market. Bancolombia has given the process a huge confidence boost.

While we would have preferred that the bond was offered to local investors, we are heartened by the indications there are more to come in 2017.

Congratulations all round!!

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

The green bond stories have come in a flurry over the last 10 days. Here’s five we think you won’t want to miss. 

NY Governor Cuomo Launches USD 100m Certified Climate Bond for Affordable Housing

The announcement by Governor Andrew M. Cuomo that the New York State Housing Authority (NYSHA) had gained Climate Bonds Certification for almost USD 100m of green bonds for low carbon housing, caused quite a stir at the Governor’s recent Sustainable Development conference.

To quote from the release:

“New York is now the first state in the nation to have its affordable housing bonds certified by The Climate Bond Standards Board, on behalf of the Climate Bonds Initiative, an international not-for-profit organization supporting financing for projects around the world that help reduce the impact of climate change.”

Governor Cuomo:

"Green Bonds are an innovative tool to build cleaner, greener, affordable housing and place New York at the forefront of sustainable development.”

“New York leads the nation in pioneering solutions to 21st century challenges, and these Green Bonds will provide hundreds of new housing units to New Yorkers in need, while reducing carbon emissions, mitigating the impact of climate change and creating a more sustainable future for all New Yorkers."

We’ll be discussing this bond further in the future, meanwhile you can read the full announcement here. 

Watch Governor Cuomo talk sustainable and affordable housing, green growth and new economy to a packed conference hall here.  

Climate leadership comes in many guises, from 4.10 mins to 30.15 mins Governor Cuomo shows some of his.

Meanwhile on the West Coast

San Francisco Public Utilities Commission (SFPUC) have just announced their second Climate Bonds Certified water issuance, with a USD 256m offering as part of their USD 4.8bn Water System Improvement Program (WSIP). This is one of the largest water infrastructure projects ever undertaken in the US.

Blog readers with good memories will have noted SFPUC led the world in May this year with the first Certified Climate Bond issued under our sparkling new Water Criteria.

Plaudits for SFPUC

We’ll have more to say in our December Market Blog due out next week. Meanwhile, plaudits for SFPUC for showing the way on matching long term green financing with climate resilient water system upgrades. 

Well done!

Mexico: Momentum on Climate Finance

In another sign of growing momentum around green finance, the newly minted Consultative Board for Climate Finance (CBFC) held a press conference in late November outlining its national role to stimulate green investment.

You can read an El Economista story (in Spanish) here.

The activity of this Board is one to watch:

• It’s a joint project of the Mexican Stock Exchange (BMV) and the Climate Bonds Initiative.
   
• The Board is formed by a co-led presidency headed by Enrique Solórzano, general director of Afore Sura and Tonatiuh Rodríguez general director of Afore XXI Banorte.
   
• The Board has diverse representation from major local pension funds, insurance companies, development banks and investment funds.
   
• Mexico2 is providing technical support.
   

​The CBFC has a broad role:

“The Consultative Board for Climate Finance will have the key responsibilities of directing investment portfolios towards green financing and fostering new regulation and investment mandates.”

“In parallel, it will seek to create incentives in special purpose vehicles through the Mexican Stock Exchange to bolster the nascent green market. “

“Another vital duty the Board will undertake is to create institutions that may certify green projects. This market will oversee that projects comply with international green criteria.”

Over the last 12-18 months we’ve blogged developments in Mexico here, here and here as Climate Bonds, MexicO2 and local stakeholders have worked together on the formation of this group.

There’s more to come from Mexico, before year’s end, into 2017 and beyond.

The CBFC is only just getting started.

BNDES, Brazil and tomorrow’s New Economy roadshow in London

It’s one of the largest development banks in the world.

So the move by BNDES to launch a R$500 million (USD144 million) green bond fund to buy domestically issued renewable energy bonds in the run up to tomorrows Investor Roadshow for Brazil’s New Economy in London is significant.  

The fund will also be a Climate Bonds Partner, our first in Brazil.

The BNDES move is significant. The Sustainable Energy Fund (Fundo de Energia Sustentável) will begin operations by mid-2017 and is intended to lead private sector investment and spur the growth of the domestic Brazilian green bond market. 

It’s a neat example of the expanded role for DFIs that many climate finance sessions at COP22 canvassed in their discussions.

London Stock Exchange and Guildhall to Host Brazil Representatives

The Brazil New Economy event on the 8^th will see BNDES join major companies CPFL Renováveis, Ecoagro, Klabin and Suzano in presenting to an international investor audience on sustainable investment opportunities in Brazil.

Suzano have just released their second green bond, following their initial USD 500m July issuance.

Regular Blog readers will recall our variousupdates and the engagement activities being led by our Director of Market Development Justine Leigh-Bell.  

More analysis of the BNDES fund will follow in our December Market Blog.

Best wishes for tomorrow

Meanwhile our best wishes go to the London Stock Exchange, Guildhall and all our Brazilian guests in London tomorrow.

Climate Bonds Initiative Annual Conference 2017 and Green Bond Awards-March 6th. 

Monday March 6^th 2017 has been set as the date for the Climate Bonds Annual Conference 2017 with a full-day event and agenda in London and an international mix of participants including institutional investors, asset managers, bond issuers, regulators and global development banks.

Green Bond Awards to follow

That same evening, the 2^nd annual Climate Bonds Green Bonds Awards ceremony will be held, a follow up to our pioneer 2016 event.

A formal Save the Date will go out next week.

#CBIac2017, you read it here first.

‘Till next time

Climate Bonds Communications

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

Mexico City Issues First LATAM Muni Green Bond: USD50M: Find out more at our Dec 13 Español and English: Green Bonds for Cities Webinars  

Mexico City (CDMX) is the first Latin American city to issue a muni bond, closing a 1 billion Mexican Pesos (USD50m) of 5 years to fund climate-resilient infrastructure and mobility projects.

Climate Bonds has been working closely with local stakeholders and green bond issuers in Mexico for over a year now, and we hear this bond is part of a larger green program planned for 2017.

The bond was over-subscribed at 2.5 times.

The use of proceeds includes potable water, waste water, energy efficiency in public lighting and subway infrastructure.

The second opinion was provided by Sustainalytics (in Spanish).

This is the 4^th green bond from Mexico, the 3^rd issuance in 2016 alone and 2^nd in local currency. 

Our December Market Blog, due out next week, will carry more details and analysis. 

More on Mexico 

Check our latest blog post that includes a Mexico update. 

Read our special June 2016 Mexico State of the Market Edition, available in English or Spanish and produced in partnership with MexicO2. 

Latest Webinars - Green Bonds for Cities on Dec 13th 

Dont forget to register for our Spanish/English Webinar:

Bonos Verdes para Ciudades– Financiamiento de infraestructura de ciudades en economías emergentes: español e inglés, Dic 13

Green Bonds for Cities -- Infrastructure finance for cities in emerging economies: In Español and English, Tuesday Dec 13th. 

Hasta luego amigos,

Climate Bonds Communications Team

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

“The IGCC congratulates Monash on taking this world leading step. This is an important milestone for the global green bond market and an exciting development for Australia.”

“It shows the valuable role that tertiary institutions can play in attracting private sector capital into low carbon investment in the built environment. Investors globally, are hungry for quality low carbon investment options.”

Emma Herd, CEO Investor Group on Climate Change Australia

What’s all about?

Australia’s Monash University has announced it is the first tertiary institution to issue a Certified Climate Bond.  

Monash is the largest university in Australia and ranks in the top 1% of universities worldwide, with an annual operating revenue of more than $A2 billion and total assets valued at $A3.7 billion.

The A$218 million (USD163m) Climate Bond was certified under the Climate Bonds Standard by the Climate Bonds Standard Advisory Board in accordance with the Low Carbon Buildings Criteria& Solar Criteria of the Climate Bonds Standard.

The University structured the Certified Climate Bond to provide the market with investment options in USD and Australian dollars over 15 years, 17.5 years or 20 years. 

A requirement for issuing the bond was that capital raised must be spent on projects that achieve measurable sustainability outcomes. Proceeds will be allocated over the next two years to low carbon campus building developments, solar energy installations and LED lighting, all contributing towards the university’s goal of zero net emissions.

Strong demand from US investors

The University has headlined the strong demand in the US private placement market for green- labelled and Certified Climate Bonds.

Interest was high with over A$900m of investor bids for the issue, CFO David Pitt noted.

Despite the current political uncertainty is looks like quality offshore labelled green debt is attractive to US institutional investors.

Coinciding with the Monash University public statement, Australia’s Clean Energy Finance Corporation (CEFC) announced they had made a cornerstone $A20m commitment.

This is the CEFC's third Certified Climate Bond investment in Australia in 2016, following earlier commitments to Westpac Banks’ first Certified Climate Bond, and to FlexiGroup's Australian-first Certified Climate Bond securitisation linked to solar PV and renewable energy assets.

Who’s saying what?

Professor Margaret Gardner, President and Vice Chancellor of Monash University:

“As a truly international university, Monash has a responsibility to provide strong and visionary leadership on sustainable development. We want our campus network to be exemplars of environmental, social and economic best practice.”

CEFC Debt Markets lead Richard Lovell:

“The CEFC congratulates Monash University on this successful raising, which is a world first. Through our involvement in this climate bond, we are highlighting the potential of this new asset class as an important source of capital for Australian and offshore investors,” said on Thursday.

“The Australia climate bond market is growing rapidly, both in the scale of our capital raisings and the diversity of the underlying assets.”

Sean Kidney, CEO Climate Bonds Initiative:  

“Monash University has joined the international pacesetters in green finance with this Certified Climate Bond. They are providing leadership by example for both domestic and international tertiary institutions and wider investment sectors.”

“This Certified issuance from Monash represents international best practice in matching capital raising with climate and sustainability objectives.”

Are there other certified bonds from Australia?

Australia has issued a high proportion of Certified Climate Bonds, indicating a strong adherence to international best practice in green bond issuance. 

The full list includes:

• NAB Dec 2014 A$300m (Solar)
• ANZ Bank May 2015 $650m (Low Carbon Buildings Wind, Solar)
• FlexigroupApril 2016 $A50m (Solar)
• Westpac Bank May 2016, A$500m (Multisector)
• Treasury Corporation of Victoria (TCV/Victorian Govt) July 2016, A$300m (Multisector)
• Monash UniversityDec 2016 $A218m (Multisector)

Why this Certified Climate Bond counts

For Universities:

In its October 2016 Market Report – Clean energy opportunities for universities– the CEFC estimated Australian universities were paying as much as A$700 million in energy costs each year, producing annual emissions of more than one million tCO2-e.

The report found that buildings account for A$28bn, or 65 per cent, of the fixed assets of domestic universities. Improving the energy performance of these primary assets could significantly reduce operating costs.

As the CEFC notes:“Monash University is increasing and diversifying the pool of eligible assets for clean energy finance, as well as providing a powerful example to the university sector that we can expect to be followed in other markets.”

More universities following the Monash leadership in their borrowing programs would add welcome diversity to various markets.

For Australia:

Australia is the world’s 13^th largest economy, with a stable financial sector, large retirement funds and a global presence in infrastructure and alternativeinvestments.

The national savings pool is fast growing, due to mandatory retirement contributions and now ranks as the third largest in the world according to the latest OECD Pension Funds in Figures report. 

Three of the ‘Big 4’ major banks, NAB, ANZ& Westpac have already issued Certified Climate Bond issuances, with NAB being the first mover, way back in Dec 2014.

This March 2016 conference presentation by ANZ Bank sustainability experts, calculates significant domestic opportunities with $A40bn of eligible commercial property, another $A40bn in rail infrastructure and a combined $A40-45bn in large and small scale clean energy projects all suitable for green refinancing.  

This September 2016 FinanceAsia Roundtable: Going green with bonds with Westpac, the CEFC and major local asset managers, reflects investors looking for the domestic market to grow, quality green debt to become available and a preference for certification and verification.

This Monash bond and the recent groundbreaking Treasury Corporation of Victoria bond are small but important examples of meeting this investor demand.

The Last Word

We’d hope to see even more green issuance in Australia, from the major banks, the commercial property sector, corporates and possibly other state based investment bodies. 

To encourage issuers, the large pension funds making their voices heard locally and internationally in seeking more labelled green product, would be another positive.

Continued growth in green finance would help build local capacity and solidify best practice as the market develops.

A strong green finance market in Australia may in time – in a subject close to Climate Bonds heart –become a greater source of green capital flow to Australia’s Asian neighbours, as they develop their NDCs into country climate plans and seek international investment to help meet their increasingly intertwined national development, clean energy, infrastructure and emissions goals.

It’s just a thought…..

‘Till next time

Climate Bonds Communications 

Market

High profile backing for green bonds came in September from Bank of England Governor Mark Carney. Global media took notice.

BBC, Mark Carney: Green finance 'a major opportunity’

"The development of this new global asset class [green bonds] is an opportunity to advance a low carbon future while raising global investment and spurring growth," said Mr Carney.

Guardian, Carney backs green finance to cut emissions and boost growth
Katie Allen, Phillip Inman

Mark Carney said more of the $100 tn (£76tn) held by big global investment firms could be channeled into green bonds to help finance initiatives such as water or renewable power projects aimed at reducing carbon emissions.

Reuters, Bank of England's Carney calls for progress on green bonds

Carney said total issuance of so-called green bonds -- for example, to help finance water or renewable power projects aimed at reducing carbon emissions -- could double in 2016 from last year's $42 billion.

Institutional Investor, Could Standardization hurt the green bonds market?
Katie Gilbert

The debate over market influence of stringent criteria for green bonds continues.

Sean Kidney, CEO of the Climate Bonds Initiative, thinks the green bonds market still has a room for consumer protections to ensure high quality offerings. These safeguards will become even more important when the market expands beyond the blue-chip bonds into high-yield sector, he reckons.

EY RECAI, The green bonds market powers up (PDF)

Big piece on green bonds and a cover page in the latest issue Renewable Energy Country Attractiveness Index (RECAI) published by EY.

“The main problem is getting new green bonds into the market,” says Sean Kidney, CEO of the Climate Bonds Initiative. For all the growth in issuance, sales of new green bonds are typically heavily oversubscribed; this offers a marginal pricing advantage to issuers. Rather than having to price new issues at a slight premium to entice investors, organizations selling green bonds can often price them in line with existing debt.

The Actuary, Green shoots in the green bonds market?
Kate Brett & Christina Teague

The world takes notice of green bonds – so does the Actuary, the leading UK publication for the actuarial profession. The reaction in our office was: nevermind the Economist, FT and Bloomberg. Green bonds made it to the Actuary!

As with any developing area of the market, many questions remain. However, there is potential for significant and rapid growth. Historical barriers, including standardization, supply and market scale, are beginning to be overcome – and we might just be seeing the green shoots of something much grander. 

IFR Asia, The inevitability of going Green
Jonathan Rogers

Following the ‘green’ COP21 and the inclusion of green finance as a critical input into the future of global economy by the G20, Jonathan Rogers says there is no escaping the green revolution in capital markets. Green bonds get a lot of his attention.

Add in the fact that the product doesn’t price through the implied curve for conventional issuance and you begin to wonder why the Green bond market is in its prevailing gangbusters state. It’s estimated that the Green bond market will smash last year’s US$44bn total for global issuance and break through the US$100bn mark by the end of this year.

Investments & Pensions Europe, ESG: Green bonds get G20 boost
Susanna Rust

Indeed, the green bond market looks to be going from strength to strength. This year so far issuance volumes have already surpassed the total for 2015, according to figures from the not-for-profit organisation Climate Bonds Initiative (CBI). 

Into Africa, Sean Kidney, CEO of the Climate Bonds Initiative tells us why going green is good

Sean Kidney talks to Into Africa about steps governments in Africa need to undertake to foster the growth of green finance.

“Green Bond markets actually start with Sovereigns providing liquidity and pricing. This is a Demonstration Issuance (…). This attracts investors but, this also demonstrates liquidity. Next you need to look at your regulatory framework, the Capital Markets framework is always important for Bond Issuance, for example Kenya which has a very good Capital Markets Authority, has already done this”.

AltEnergy Stocks, Climate Bonds Mid-Year Green Bond Round Up

AltEnergyStocks republished our summary of Q1 and Q2 of 2016.

In the post COP21 and now COP22 shift of focus from agreement making to implementation, green bonds are increasingly being highlighted as part of converting country commitments (NDCs) to climate finance actions.

Environmental Finance, Helping cities in developing countries benefit from the green bond market
Padraig Oliver

Padraig Oliver from Climate Policy Initiative on ways in which cities in developing countries can tap into the green bond market.

Clearly, cities don't necessarily need to issue their own bonds to access capital via the green bond market. City or municipal-based infrastructure development companies could provide one option for them to do so. Such companies commonly raise finance in developing countries such as China, often with central government guarantees.

Environmental Finance, Cities and climate change - the funding gap
Cecilia Reyes

Also Cecilia Reyes from Zurich Insurance explores how green bonds can fund sustainable growth in the cities.

(…)several cities and municipal and transport authorities - including Johannesburg, Gothenburg, New York, Seattle and London – have already issued green bonds. It is expected that New York will spend over $27 billion on green infrastructure, with green bonds presenting a possible financing option.
 

China

Bloomberg, In China, Black Is the New Green
Christopher Langner

Author questions the ‘green’ quality of some of the Chinese green bonds. However the announcement of PBOC’s Yi Gang that China will work to set up a more complete green finance system by 2020 instills some optimism.

The PBOC announcement, however, is promising. It signals that officials are aware their approach needs to be fine-tuned. And while Western investors still shy away from Chinese environmental notes, steps are being taken to bring the market up to par.

China Daily, Confusion marring green bonds industry
Wang Yanfei

Author of China Daily’s article refers to Ma Jun, chief economist at the People's Bank of China's research bureau, who expressed concerns over the lack of clear definition in the Chinese green bonds market.

Although China has now become the largest issuer of green bonds - at a total value of 120 billion yuan ($17.99 billion) in the first seven months of this year - a lack of a clear definition of what can be deemed green may limit the appeal to investors, according to Ma.

South China Morning Post, What is green? Green bond investors in China need an answer
Cathy Zhang

Worries over green credibility of Chinese green bonds persist.

A notable feature of the Chinese guidelines, as compared to other markets, is that they permit the operators of clean coal facilities to issue green bonds, even though it is internationally accepted that the funding of fossil fuel power generation does not qualify for green bond classification.

Claxin Online, Loopholes Linked to Third-Party Verification Undermine China's Green Bond Market, Says Economist
Wu Hongyuran

A good analysis of the fledging green bonds market in China. Author refers to remarks made by Industrial Bank Co. researcher Tang Weiqi.

Because green bonds were less costly and more attractive than their traditional counterparts, some companies have attempted to disguise traditional bonds as climate bonds, Tang said. To combat such dishonest practices, he advised releasing detailed national guidelines for third-party verification procedures and stricter licensing requirements for verification agencies. 

Climate Change News, UK pitches China for climate-friendly finance trillions
Ed King

Ed King on UK-China collaboration in green finance.

“We need activist global leadership between China and the UK,” said Sean Kidney, head of the London-based Climate Bonds Initiative.

China Daily, China bonds get new tinge: green
Wu Yiyao

Overview of the green bond rise in China inspired by the recent China Three Gorges Corp issuance.

The timing also appears to be just right for the green bond market to develop in China. The country is making efforts to transform its economic growth pattern so it could make more with less, said analysts.

Blue & Green Tomorrow, CCC Launches New Partnership With Climate Bonds Initiative & CECEP

In association with the China Central Depository & Clearing and CECEP Consulting, we have launched world's first Climate-Aligned Bond Index.

The launch of ChinaBond China Climate-Aligned Bond Index now provides a series of indicators to reflect the price change of overall climate-aligned bond market and climate-aligned investment performance benchmark for domestic and foreign investors.

Global Capital, Asia’s green debt needs bigger state support
Narae Kim

Another area where a government can play a more active role is to align rules with international guidelines. China’s Industrial Bank’s green bonds, sold onshore, can be an example, said Sean Kidney, chief executive of the Climate Bonds Initiative.

Climate Bonds Standard

In August we released emissions performance trajectories for Australian commercial buildings. October then saw the approval of the new criteria for climate-resilient water bonds. This and other Climate Bond Standard news was covered by the media.

Australian Financial Review, City-by-city system benchmarks building carbon emissions for investors
Michael Bleby

The carbon emissions of commercial office buildings in Sydney, Melbourne, Brisbane, Adelaide, Perth and Canberra can be measured under a new standard designed to make it easier for institutional investors wanting "green" assets. 

The Fifth Estate, Release of climate bond emissions trajectories set to boost green building investment
Cameron Jewell

Investors can put money in green buildings and be assured they’re helping to meet global climate change targets, following the release of emissions performance trajectories for Australian commercial buildings by the Climate Bonds Initiative.

Investor Daily, Property carbon emissions tool released
Killian Plastow

Climate Bonds Initiative chief executive Sean Kidney said the trajectories should “spur green property development in the commercial heart of Australia’s major cities” and assist in the reduction of carbon emissions.

Blue & Green Tomorrow, Green Property Bond Investment In Australia Receives A Boost

These trajectories have been set by examining the emissions performance of the top 15 per cent of office buildings in each market, and then determining the trajectory required to achieve zero emissions by 2050.

Climate Control News, Tools to measure commercial property developments and retrofits
Sandra van Dijk

Climate Bonds Initiative provides an easy-to-use CO2 Target Calculator on its website to enable issuers to ascertain the emissions performance targets that must be satisfied in order to gain Climate Bonds Certification.

Blue & Green Tomorrow, New Standard for Climate-Resilient Water Bonds Given Go Ahead

The Climate Standards Board has approved a new standard for climate-resilient water bonds, providing investors with a verifiable, science-based screening process to evaluate bond investments earmarked for financing sustainable water-based infrastructure projects.

FTSE Global Markets, PwC UK confirmed as Approved Verifier to Climate Bonds Standard

Climate Bonds Initiative (CBI) CEO Sean Kidney explains that, “As an Approved Verifier they can support green bond issuers in every corner of the planet; that will make a significant and sustained contribution to the rapid scaling of the green bonds market”.

The Rockefeller Foundation, Bridging the Climate Finance Gap: Green Bonds

In an article for the Rockefeller Foundation, Justine Leigh-Bell and Anna Creed talk about Climate Bonds’ mission and the sector Criteria that are being developed as part of the Climate Bonds Standard.

The Standard is designed to bridge the gap between the supply of green infrastructure development plans required to meet national commitments under the Paris Agreement on one side, and investor demands for climate action on the other.

NTPC bond

India’s largest power utility, the giant NTPC issued its first green Masala bond. It’s a Certified Climate Bond with the use of proceeds allocated to solar and wind power projects in India; it garnered a lot of media attention. 

Financial Times, India’s top power group sells ‘green’ masala bond
Jennifer Hughes

India’s largest power group has raised Rs20bn ($299m) in masala bonds and added a twist to what is only the second deal in the sector by designating the issuance “green” — a particularly hot label this year.

Barron’s,Can India Finance Green Energy With Masala Bonds?
Dimitra DeFotis

Oil importer India is looking to spice up its bond market with rupee-denominated offshore “masala” bonds for developing green energy projects.

LiveMint, NTPC raises Rs2,000 crore via green masala bonds on LSE
Aditi Khanna

The listing follows the visit of power minister Piyush Goyal to the UK earlier this year to strengthen UK-India collaboration on power and renewable energy.

The Hindu Business Line, Recent Masala bond issuances to pave way for opening up the market, says Fitch Ratings

The recent issuance of the first offshore masala bonds (rupee-denominated bonds in overseas markets) by Indian companies could pave the way for a broader opening and development of the market, according to Fitch Ratings.

Reuters, India's Masala movement gets a green injection, Krishna Merchant

It is the third Indian company to issue so-called Masala bonds since HDFC opened the market last month, and the first to carry a green label. 

Business Standard, NTPC lists world's first green Masala bond by an Indian issuer on London Stock Exchange

The bond is Climate Bonds Initiative certified and will be listed on London Stock Exchange's green bonds segment.

Country editions of the State of the Market report

Our global July launch of the State of the Market Report was followed by several releases of the local versions of the report. This included Brazilian, Mexican and recently: Canadian and Indian launches. The latter coincided with the first meeting of the new Indian Green Bonds Market Development Council. Here is how these were covered in the media.

La Tribune, Obligations climatiques : la France dans le podium des trois plus grands émetteurs
Giulietta Gamberini

French daily newspaper on our Bonds & Climate Change. State of the Market Report 2016. The report found France to be the third largest issuer of climate-aligned bonds.

Si en matière d'énergies renouvelables la France est en retard, elle est néanmoins très active sur le marché des obligations climatiques. Des 694 milliards de dollars (…) en cours au niveau mondial, 9% (…) ont été émis sur le marché français, relève une étude réalisée par la Climate Bonds Initiative (CBI) sur demande de la banque HSBC.

Blue & Green Tomorrow, Bonds and Climate Change: State of the Market 2016 Mexico Edition Launched

In Mexico, there are $1.3bn in climate-aligned bonds outstanding; including the country’s only labeled green bond ($500 million) issued by Nacional Financiera (NAFIN). Although climate-aligned issuances in the country have been small, the potential for future issuances is vast, considering Mexico’s ambitious climate goals.

Blue & Green Tomorrow, Slow Growth For Green Bonds Market In Canada

Canada’s climate-aligned bond market has grown to C$32.9bn – making Canada’s markets the 5th largest in the world.

Environmental Finance, Canadian government urged to support green bond market

In a report co-authored with the Climate Bonds Initiative (CBI), the SPI suggests that a lack of understanding of the benefits of green bond issuance among potential issuers may be the main barrier to the market's growth. "Government issuances and government policy actions" could help overcome these barriers", it says.

PV-Tech, India’s green bond market surges in 2016 – CBI

India’s green bond market took off this year becoming the seventh largest labelled green bond issuer with US$2.7 billion issued as of 12 October, according to the Climate Bonds Initiative (CBI).

India Climate Dialogue, India’s green bond market expands

India has emerged as a good destination for investors wanting to put their money in projects with a low carbon footprint.

More media coverage of the Bonds & Climate Change. State of the Market 2016 here.

Quarterly green bonds figures

Moody’s quarterly calculation put China in the leading position among green bond issuing countries. The country’s issuance accounts for 44% of the total figure.

Reuters, China leads record global green bond issuance in Q3 - Moody's

China led the surge in global green bond issuance in the third quarter which amounted to a record $26 billion, a report from Moody's Investors Service said on Tuesday.

FTSE Global Markets, Green bond volume for third quarter points to another yearly record

"The volume for the third quarter pushed green bond issuance for the first nine months of the year to $63.2bn, an increase of 132% from the $27.2bn issued a year ago", says Henry Shilling, a Moody's senior vice president. 

China Daily, China leads global Q3 green bonds issuance: report

Significant issuances from Chinese banks marked a return of the pattern observed in the first quarter, leading China to account for 44 percent of global issuances.

Luxembourg Green Exchange

Financial Times,Luxembourg launches world’s first ‘green bond’ platform

Reuters, Luxembourg Stock Exchange launches green bond platform

The Luxembourg Stock Exchange launched a platform for green bonds on Tuesday, called Luxembourg Green Exchange (LGX), to set a new benchmark for the growing market.

Bloomberg, World’s First Green Securities Exchange Announced in Luxembourg
Anna Hirtenstein

It intends to act as a gatekeeper for green bonds and other environmentally-focused financial instruments to help reduce ambiguity in the market.

Pensions & Investments, Luxembourg Stock Exchange launches first green securities platform
Sophie Baker

Only issuers that comply with “stringent eligibility criteria” may gain access to the platform, which aims to set a new benchmark for the green financial instruments market.

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.

"We believe the Forum has helped bring the financial element that has been missing into climate discussions, especially involving implementation of Brazil's COP21 NDCs.”

Elizabeth de Carvalhaes, Executive President of IBA (Brazilian Tree Industry)

What’s it all about?

150 Brazilian stakeholders and international investors gathered at London’s Guildhall to discuss green finance opportunities as Brazil begins to implement policies to meet its NDCs, and associated goals for energy, agriculture, land use, and forestry.

The New Economy forum took place against the back drop of the recent establishment of USD 144m Sustainable Energy Fund (Fundo de Energia Sustentável) by national development bank BNDES and the announcement from paper giant Suzano of their second green bond issuance.

The BNDES Fund is intended to lead private sector green investment and spur the growth of the domestic Brazilian green bond market. The new Suzano green bond is the first issued in local currency, the Real (and 3^rd for Brazil).

According to Marcelo Bacci, CFO at Suzano, their green bond had “the lowest yield ever in a CRA (green securitisation) in the local markets, mostly due to its green characteristics.”

Brazil, the giant

Brazil is big. In lots of ways. It has the world’s largest area of arable land in a single country, is the biggest economy in Latin America and 9^th largest internationally.

It's also the 5^th in population. It’s largest city, São Paulo, is amongst the top 20 global megacities in 2016, and is set to remain there in 2030 with an estimated population of almost 25 million.

World leading numbers:

• Brazil is the world’s largest exporter of sugar and soybeans,
• 2^nd largest producer of Ethanol,
• 2^nd largest eucalyptus pulp producer,
• 3^rd largest exporter of corn,
• 4^th largest producer of fibre furnish,
• Largest producer of sustainable FSC certified packaging,
• 10^th in installed wind capacity and by 2019, is expected to be the 6^th largest wind market in the world.

This Chart from the Ministry of Agriculture’s presentation at the New Economy forum tells the full story:

Who’s said what?

The impact of the event in building for Brazils sustainable economic direction and climate finance goals has been widely acknowledged…

Eduardo Dos Santos, Ambassador of Brazil to the UK:

"Beyond green finance opportunities, the forum highlighted Brazil’s ambition to reinforce its position at the forefront of a model of development that is prosperous, inclusive and sustainable – not only economically, but also socially and environmentally.”

“Brazil’s increasingly engaged private sector and solid green policy framework is already unleashing a revolution in terms of demand, scale and governance for new sustainable development projects."

Flávio Girão Guimarães, Brazil Ministry of Finance:

“The new framework behind Brazil's infrastructure projects cannot be missed by investors who live in a world of low yields. It is an opportunity to combine economic grow, sustainability and return.”

Elaine Lustosa, Director of Capital Markets BNDES:

"The Climate Bonds Initiative event in London and our Fundo de Energia Sustentável (Sustainable Energy Fund) are positive steps to boost green finance and a strong domestic green bond market.  Together they can attract domestic and international investors and grow the Brazilian low carbon economy."

Michelle Lourenço Corda, IR Director Suzano Pulp and Paper:

"Participating in the New Economy Forum was a unique opportunity for Suzano to share with investors the experience of being the first Brazilian company to issue green bonds in USD in the international market. We look forward to the development of the market for green financing opportunities in Brazil." 

Flávia Carvalho, IR SuperintendentCPFL Renováveis:

"As a pure-play renewables company, CPFL Renováveis is confident in the development of the green bond markets in Brazil and we believe it’s an important alternative to incentive sustainable projects. The opportunity to participate at the Brazil's New Economy forum in London with the Climate Bonds Initiative London, is one we could not have missed." 

Elizabeth de Carvalhaes, Executive President of IBA (Brazilian Tree Industry):

"We believe the forum has helped bring the financial element that has been missing into climate discussions, especially involving implementation of Brazil's COP21 NDCs.”

Milton Menten, CEO Ecoagro:

“Ecoagro was proud in participating in the Climate Bonds Initiative 'Investor Roadshow for Brazil's New Economy' in London. It was pretty clear that Brazil is expected to assume a prominent position in the short term as one of the world's main players in green bonds, especially those related to agribusiness, such as green CRAs.”

“The event was also a good opportunity to demonstrate Ecoagro´s leadership in this segment and promote the first ‘green CRA’ issuance in Brazil last November."

The Last Word

The FAO estimates Brazil will have to increase its food production significantly to help meet demand from global population growth of the next decades. The Vice Minister of Agriculture’s presentation to the forum projected increases of more than 33% in grain, milk, pulp and meat production over the next the next decade (check the presentation here).

Simultaneously the world’s largest and most diverse tropical rainforest (the lungs of our planet) needs protection.

A quick look at the rankings and review of United Nations' Food and Agriculture Organization estimates show that accelerating international sustainable land use, agriculture and forestry practices is really all about new ways to feed a large part of the world. And will help meet many of the Sustainable Development Goals (SDGs).

In November 2016 International Finance Corporation’s (IFC) Climate Investment Opportunities in Emerging Markets report, estimated Brazil’s climate smart investment potential for selected sectors at USD 1.3 trillion from 2016–2030.

Investment in sustainable agriculture and low carbon land use will not just be beneficial for Brazil.

This are some of the reasons why Climate Bonds has been so active in Brazil over the past two years, working with the UK Embassy and FCO and the PRI, with local investors and the Business Council for Sustainable Development (CEBDS) to establish the Council for Sustainable Market Development in order to develop market mechanisms and catalyse a robust pipeline of green investments.

Brazil’s New Economy event in London was another step in matching global capital with the climate future that Brazil represents. They’ll be more to come in 2017.

Vai Brasil!

‘Till next time,

ClimateBondsCommunicação

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation. 

2016 is drawing to a close, and while it hasn’t been exactly full of good news for climate or humanity in general – there is a bright spot – green bonds!

2016 issuance has reached double that of 2015.

This is largely due to China (see chart below) but even without China, issuance has reached $55bn.

The big stories of this year have been emerging markets acceleration from China, India beginning to move and exciting developments in Africa and LATAM.

Sweden and Poland have given everyone an early Xmas present

The Swedes have announced an Inquiry to promote the market for green bonds chaired by Mats Andersson, former CEO of the Fourth AP Fund.

We really like the terms of reference - check out the full story below.

Poland have beaten everyone to market with the world’s first Sovereign Green Bond, and we now look forward to France, Sweden, Nigeria and others issuing during 2017.

We touch on Poland’s’ landmark further down.

So, here’s our last Market Blog of the year, bursting with green bond stories for you to enjoy.

Green Bond issuance YTD

As of today, non-China labelled green bond issuance sits at $55bn and Chinese issuance consistent with international definitions is $23bn for a total of $78bn. 

Adding the $12bn of green bonds that are only aligned with Chinese standards sees the figure at $90bn.

If all this green bond news excites you as much as it does us – why not consider joining us in our mission as Relationship Manager for our Partners Program! More details here.

Sovereigns

A Polish Xmas present!

Poland has won the race started by France in April 2016 to be the first to issue a Sovereign Green Bond.

Sweden, Nigeria and Kenya are still on track to issue and Climate Bonds know of several other nations quietly working on plans.

So, 2017 may yet be the ‘Year of Sovereigns.’

We’ll have more to say in this special post out tomorrow, but in the meantime this is a great Xmas present for green finance from Poland.

Well done!

Sweden Green Bonds Inquiry

The Swedes are going about this in their typical thorough fashion. The full announcement in English is here or you can watch the 15 min press conference video and read the details in Swedish here.

This paragraph in the announcement caught our eye:

"The remit includes analysing and producing examples of project types that could be financed through green bonds, and proposing a structure for processes and criteria that identify green projects.

The inquiry is to also analyse and present proposals on processes and routines for third party validation of green bonds, and present proposals on what information investors need to make well-founded investment decisions."

All good, all round another excellent Xmas present, from Sweden.

Certified Climate Bonds

San Francisco issues 2nd certified water bond for USD259.3m

The San Francisco Public Utilities Commission (SFPUC) has issued their second green bond certified under the Water Climate Bonds Standard, coming to market with a $259.3 million offering.

The 30-year fixed-rate notes, which have been issued in a series of tranches with an overall true interest cost of 3.21%, will be used to fund eligible projects linked to stormwater management and wastewater projects.

The bond will be repaid through the net revenues of the SFPUC's Wastewater Enterprise arm, which operates and maintains the city's sewer system.

Sustainalytics verified that the notes were in line with the Climate Bonds Initiative's Water Criteria.

Link to prospectus here.

Underwriter: Wells Fargo.

Australia’s Monash University issues first Climate Bond from a University (AUD 218m, USD 163m)

This Certified Climate Bond is notable for a couple of factors.

It’s a world first in the tertiary sector.

Secondly, the bond was sold primarily through private placement in the US market with demand reported at over $900m, indicating that American investors will take up quality green product regardless of political atmospherics around climate. The bond will finance low carbon campus developments and clean energy projects in line with the zero emissions target

EY provided the verification.

We wrote an extensive Blog on this Monash move and recent green bond developments in Australia a few days ago. It’s well worth a look.

Another first from the US: New York State Housing Finance Agency (HFA) Certified Climate Bond under Low Carbon Buildings Criteria

Last week, we reported here on New York State Housing’s certified Climate Bond for low carbon housing.

Here are a few extra details…

The bond will provide new houses to very low-income New Yorkers as well as targeting carbon reduction and sustainability measures.

All homes are compliant with the Climate Bonds criteria for Low Carbon Buildings.

We like this bond, and think Governor Andrew M Cuomo and his people are showing their own brand of climate leadership at a state level.

Let’s have some more, please!

Underwriters: Citibank.

Corporate bonds

China's Bank of Communications issues biggest green bond EVER... RMB 30bn (USD 4.4bn)!

One of China’s big five commercial banks, Bank of Communications, issued its inaugural green bond in the China Inter-bank market on 18^th November.

At RMB 30bn (USD 4.4bn), it is the largest green bond issued in a single transaction, ever!

According to the prospectus, proceeds will be used to finance projects in:

• energy saving;
• clean transportation;
• clean energy, pollution prevention;
• ecological protection and adaptation;
• resources conservation and recycling.

While exact projects are not disclosed, Bank of Communications has provided details on a series of environmental targets for the RMB 30bn proceeds’ allocation in the prospectus, including reductions of:

• 0.8 to 1.6 million tce (ton of standard coal equivalent);
• 2 to 4 million tons reduction in CO2 emission;
• 15 to 30K tons COD discharge;
• 1 to 2K tons Nitrogen Ammonia discharge;
• 2 to 4k tons SO2 discharge;
• 400 to 800 tons NOx discharge;
• and to achieve 1 - 2 million tons of water savings.

We have not found any information indicating that clean coal projects will be financed with the proceeds, so it is included in our database.

If future reporting confirms that clean coal projects are being financed, the bond will be removed.

The external review was provided by Deloitte.

GB1 (Excellent) grade was assigned by Moody’s to this bond, making Bank of Communications the first China-based entity to undergo the new Green Bond Assessment process announced by Moody’s earlier this year.

Underwriters: Industrial and Commercial Bank of China, Construction Bank of China, China Merchants Bank, Guotai Junan Securities, Haitong Securities, China Development Bank Securities, Everbright Securities, GF Securities, China Securities, BOC International.

Colombia: Bancolombia Issues First Green Bond for 350 Billion COP

Brazil, Mexico, Costa Rica and now Colombia. The LATAM list grows.

Last week, we reported that Bancolombia, Colombia's largest commercial bank, has issued its first green bond, raising 350 billion Colombian Pesos (USD 115m) to expand financial services for private sector investments that help to address climate change.

IFC was the sole investor in the bond.

Here are some more details:

The bond received a second opinion from Deloitte which has not yet been published.

Eligible projects are detailed in Spanish here and include:

• Renewable energy:

Biomass;

Biogas;

Biofuels;

Geothermal;

Hydro – ‘ideally small scale’;

Solar energy;

Wind energy.

• Sustainable construction:

Location choice: to take account of sun aspect, soil sustainability;

Sustainable materials: use of recycled and renewable materials;

Energy efficiency e.g. LED lighting, skylights, efficient air conditioners;

Renewable energy: e.g. solar panels. 

While the eligibility criteria include many ‘easily green’ areas, there are some areas which will require more work if Bancolombia decides to allocate proceeds to such projects.

Biofuel and hydro projects require additional information and disclosure.

For hydro, this will be around the size of the project and the size and location of the reservoirs.

For biofuels, we’d like to see some additional information, and transparency will be required on the feedstocks used and the governance around these.

As we noted in our initial Dec 6 blog announcing the bond, Colombia has been one of our Climate Bonds priorities for LATAM throughout 2016. We’re now working with the Department of National Planning and other groups to lay the foundations for a domestic green bond market.

This initial bond has given that process a boost for 2017.

Felicitaciones Colombia!

Underwriter: Bancolombia.

BMCE Bank of Africa closes 1^st green bond for 500m Moroccan Dirham (USD 50m) – 8.3x oversubscribed!

Banque Marocaine du Commerce Extérieur (BMCE) Bank of Africa, one of Morocco’s largest commercial banks, came to market with its MAD 500m (USD 50m) inaugural green bond last week.

The deal was unlisted and was 8.3x oversubscribed.

All eligible projects are based in Morocco and managed by small, medium or large enterprises to develop local sustainable industry. An internal Green Bond Committee will oversee evaluation and selection of eligible projects on a case by case basis, with the help of external consultants specialised in the energy industry.

Disclosure on the proceeds allocation, environmental benefits and ESG risks will be done by the BMCE for each eligible project and will be integrated in the annual process of financial reporting.

Use of proceeds will be directed to:

• Renewable energy;
• Hydroelectric power plants (installed capacity of less than 15MW);
• Wind turbines;
• Biomass generation of heat or electricity;
• Solar thermal and PV power plants;
• Production of hot water systems for treatment processes and/or heating/cooling of local and/or domestic hot water;
• Drying systems with high/low temperatures;
• Geothermal.

Biogas installations fuelled by agricultural, industrial or municipal waste as well as wastewater.

• Energy efficiency projects: investment in equipment, technology or projects to achieve a 20% energy saving (or 30% for commercial buildings) or 20% emissions reduction.

Vigeo Eiris provided a review of the bond which can be viewed in the full prospectus here (in French) or a summary of recommendations (in English) here.

The summary document contains recommendations form Vigeo Eiris on use of proceeds, project selection, management of proceeds and reporting. Recommendations include defining renewable energy and energy efficiency projects more specifically especially clarifying the baselines used.

Not all recommendations have been achieved yet but those which have not are in progress.

We would add to these recommendations that further information be provided around the specifics of certain types of energy generation especially:

• Disclosure of eligible feedstocks for biomass projects;
• Percentage of gas-fired backup allowed for solar thermal projects;
• Environmental benefits of drying and hotwater systems.

Underwriter: BMCE Bank

Southern Power issues a second green bond for 2016 (USD 1bn)

US based energy provider Southern Power has just returned to the green bond market for the third time since 2015. Its latest bond consists of three tranches amounting to a total of USD 1.3bn, of this, two tranches are green totalling USD1bn. 

While there is no external review, from a green perspective, this is pretty simple - proceeds will be allocated to solar and wind energy projects in the US.  The information available does not specifically state whether the solar power is PV or solar thermal but we note all green bonds to date have been allocated to solar PV.

Southern Power’s green energy portfolio includes 21 solar and wind projects in the U.S., representing approximately 1,550 MW of capacity owned, under development or under contract.

Reporting on allocation of proceeds of previous green bonds can be found here.

Underwriters: Bank of America Merrill Lynch, Barclays, BNP Paribas, Mizuho Securities, Scotia Capital, US Bancorp

BNP Paribas' inaugural green bond out (EUR 500m, USD 533m)

BNP Paribas have joined the surge of French issuance this year with its debutgreen bond for EUR 500m.  As we noted in early December, France is the 2nd largest country of issuance for labelled green bonds (with USD 15.8bn outstanding) and the largest issuer in Europe.

To accompany its inaugural issuance, BNP Paribas have put together some comprehensive reporting (here) which includes the green bond framework, prospectus, external reviews etc.

For this green bond use of proceeds is straightforward - all proceeds will be used exclusively to refinance 15 wind power projects and 3 solar power projects, both PV and Concentrated Solar Power (CSP).

The Oekom review states that for all Concentrated Solar Power projects, a minimum of 85% of electricity is generated from solar power – meaning that less than 15% is generate from gas power as a back up.

This is in line with the Climate Bonds criteria for CSP which requires that gas-fired back-up account for less than 15% of the electricity generated.

Excellent detail in reporting and great news!

BNP Paribas has also put together a Framework which includes additional eligible sectors for investment. These criteria will be used to select additional projects if new transactions need to be added to the pool.

Additional eligible assets include:

• Renewable Energies: wind, solar thermal, solar PV, run-of-river hydro projects or upgrades to existing assets, bioenergy and geothermal;​​
• Energy Efficiency: Green buildings certified to minimum LEED Gold or BREEAM Very Good, retrofit of buildings, LED street lighting, smart grid;
• Mass and Public Transportation: energy efficient public transport upgrades (e.g. alternative fuel/ electric buses), passenger and goods rail, metro and rail infrastructure, non-diesel rolling stock;
• Water Management and Water Treatment: upgrades to treatment plants, water use minimization, leak prevention, irrigation, wastewater;
• Recycling: development/upgrades of waste-to-energy, recycling of plastic, metals and paper.

   Underwriter: BNP.

We Blogged in both Englishet français recently on the global green leadership France has displayed over several years.

« La France sous les projecteurs: un acteur clé en matière de finance verte et d’investissement durable » ici, or in English here.

Vive la République!

Iberdrola Finanzas's EUR 750m green bond (USD 806.5m)

Spanish utility Iberdrola has issued an EUR750 million green bond and will use the funds to refinance wind farm investments in Spain. The issuance received a second opinion by Vigeo Eiris.

According to reports, Iberdrola said the issuance price is very competitive in an environment impacted by volatility in interest rates and credit following the US elections.

The company noted that green bonds usually attract higher demand thanks to interest from socially responsible investors.

This is Iberdrola's fourth green bond, making a total of 3 green bonds issued so far this year.

¡Felicitaciones!

Underwriters: Barclays, Goldman Sachs, BNP Paribas, ING Bank, Mitsubishi UFG, UniCredit, Lloyds.

Fabege borrows SEK 700m (USD 76m) through green bond Nya SFF green bond

Swedish financing vehicle Nya Svensk FastighetsFinansiering AB (Nya SFF) has issued its latest SEK 700m green bond.

Nya SFF is owned by five companies within the building sector in Sweden, including Fabege (which is also a green bond issuer and owns 20% of Nya SFF).

It is a financing vehicle which exists to enable its five owners to increase their focus on environmental issues. The full amount of the green bond will be borrowed by one of the owners (and well-known green bond issuer) Fabege.

The green bond framework states that commercial buildings which meet the following eligibility criteria are eligible for inclusion:

• Certification existing or expected to either:
  
  •  LEED Gold;
  • BREEAM In-Use Very Good;
  • Miljöbyggnad Silver.
     
• And 25% less energy usage than applicable codes and the Swedish national average.

Additionally, the buildings must have 25% less energy usage than applicable codes and the Swedish national average.

LEED Gold and equivalent level certification shows great levels of ambition and is in line with the Climate Bonds Criteria for Low Carbon Buildings. Furthermore, the 25% improvement on the national average ensure that GHG reductions are ambitious against the national average.

The bond is listed on the Nasdaq Stockholm Sustainable Bond List.

Underwriter: Swedbank.

SKB (Stockholms Kooperativa Bostadsforening) inaugural green bond - SEK 300m (USD 32.5m)

The real estate industry greets another inaugural green bond issuer from the Nordic region.

SKB operates as a membership-owned housing co-operative in Sweden. It owns, manages, and rents a portfolio of apartments primarily in Stockholm to its members. 

The green bond received a second opinion on its green bond framework by Cicero.

It will finance projects under the following categories:

• Renewable energy generation (wind and solar power);
• Energy efficiency improvements in existing residential and commercial properties aiming to achieve:
  • a total energy use reduction of 25% minimum, per year and per square meter.
  • Miljöbyggnad Silver environmental certification.

Our understanding is that Miljöbyggnad Silver certification is in line with LEED Gold or BREEAM Very Good which means that it is in line with the ambition level in the Climate Bonds Low Carbon Building Standard.

Underwriter: Handelsbanken.

DunAn Holdings Group’s first RMB 1bn (USD 145m) Green MTN

DunAn Holdings issued its first green bonds on China Interbank market. As a Chinese PoE (Private owned Enterprise), DunAn engages in large heating and ventilation system equipment, motors, and other machinery manufacturing.

It is also involved in the development, construction and operation of wind farms and photovoltaic power plants; and production of renewable energy.

The allocation of proceeds:

• RMB886 million proceeds will be used for the following new projects: 
  • 3 wind farms;
  • 7 heat supply projects of which:
• 5 waste heat recovery - one of them is using * CDQ* waste-heat technologies;
• 1 is linked to renewable energy, and
• 1 has no information.​
• RMB114 million will be used to refinance 11 wind farm projects.

So – what exactly is *CDQ* (Coke Dry Quenching)?

That was the first question we asked, too.

CDQ is waste heat recovery system used in iron & steel making industry. It uses gas instead of water in an enclosed loop to cool hot coke prior to its use as combustable feedstock in blast furnaces or other ironmaking processes. The hot gas can be recycled to create electricity, saving on energy consumption reducing CO₂ and other pollutant emissions.  

We won’t go into the entire primary steelmaking cycle, we do have a staffer who worked in steel for many years but please don’t get him started, so quick-some more background on CDQ is here.

CDQ projects have been included within the UN CDM.

CDQ will fit under our industrial energy efficiency work stream and while there is no technical working group yet, some initial groundwork has been done for this to begin.

We do not have specific criteria but the research we have undertaken suggests that from an environmental point of view, CDQ is the best available technology for iron and steel production that uses the conventional blast furnace route and that the capture of waste heat allows savings in GHG emissions.

We have therefore included it in our data set.

Underwriters: Industrial Bank, China Development Bank.

Bank of Qingdao issue RMB 4bn (USD 577.9m) green bond

According to the prospectus, proceeds will be allocated to finance projects that can be categorized into Pubco’s catalogue, including:

• pollution prevention;
• resource conservation and recycling;
• clean transportation;
• clean energy and
• adaptation.

Bank of Qingdao only disclosed two “typical projects” to be financed, including a solar farm and energy efficiency improvement for a thermal power plant. The energy source of the plant is not specified – a thermal power plant could include: geothermal, waste-to-energy or fossil fuels.

Details are light at this stage but initial review indicates that all areas to which proceeds will be allocated are aligned with the Climate Bonds Taxonomy.

We’ll carry out further review as reporting is released.

EY undertook the external review.

Underwriters: Guotie Jinan Securities, Zhongdu Securities.

JS Nantong Rural Bank’s inaugural green bond, RMB 500m (USD 72m)

Bond proceeds will be used for 5 projects, including:

• a solar farm with 12MWp capacity;
• two sewage treatment plants;
• a WEEE recycling project;
• and a water-use efficiency project for fish farming, which can reduce 90% of fresh water use and reduce pollution accordingly.

Underwriter: Guotie Jinan Securities.

External Review: EY.

Asset Backed Securities (ABS)

Brazil’s Suzano issues first Brazilian green ABS for BRL 1bn (USD 291m)

Last week we blogged about Suzano’s green bond – the first Brazilian entity to issue a bond in Brazilian Real. Here are some more details:

SITAWI has provided a second opinion on the framework and although it is not public – they were kind enough to let us take a look. It notes that…

Proceeds will be used to finance Suzano's sustainable forest management activities, including:

• the maintenance of areas already certified;
• the expansion of areas in the process of being certified (they will comply with the national and international standards such as the FSC, Cerflor (PEFC) or equivalent certification);
• other projects aligned with the FSC/Cerflor requirements, such as the maintenance of (plant) nurseries, planting and harvesting activities, any expenses incurred to acquire the certifications as well as training and monitoring for the certifications.

We have a Technical Working Group busy on land use criteria at the moment so although we don’t have clear criteria yet, international certification from bodies like FSC will be part of the criteria.

In addition to certification, we will be looking for robust disclosure – particularly around new forests: where they are, what land it is on and whether they are clearing land with high conservation value.

These will all be important factors as we see more bonds linked to sustainable forestry in the future.

There’s a report here on the recent Brazil's New Economy Forum Climate Bonds held in London last week with numerous Brazilian stakeholders, including Suzano.

Sustainable land use, agriculture and forestry are big issues in the world’s ninth largest economy. Have a look.

Muito bem, Suzano for being the first and showing leadership!

Development Banks

KfW issue latest USD 1.5bn green bond

KFW have issued their 3rd bond of 2016. As with other bonds, proceeds will be used for its environmental investment program – more details here. Second review from CICERO here.

Investor make-up: European investors = 35%, American investors = 34%. Investors included IKEA and TIAA Global Asset Management.

Underwriters: Bank of America Merrill Lynch, Goldman Sachs, Société Générale.

But wait, there’s more!

In their Capital Market Activities 2016-2017 statement posted a couple of days ago, KFW outlined a ‘Strong commitment to qualitative development of green bond market’ as part of next year’s directions.

"We will continue our commitment to the green bond segment as issuer, investor and Executive Committee of Green Bond Principles member in 2017. Germany's G20 presidency will provide us with the opportunity to continue our dialogue about the responsibility of the capital market not only with market participants but increasingly with the political sphere as well,” Gunther Braunig, executive board member in charge of capital markets from Frankfurt, reported by Environmental Finance.

African Development Bank (AfDB)'s SEK 1.25bn green bond

This is AfDB’s first green bond for 2016, and the 11^th green bond issue since their inaugural bond 6 years ago. Proceeds will be used to finance projects eligible under their green bond framework. Cicero provided a second review for the framework.

China’s Exim Bank's first green bond RMB 1bn (USD 145.3m)

Export-Import Bank of China is one of three development banks in China, and the first to issue a green bond. The Export-Import Bank of China is a state bank owned by the Chinese government and under the direct leadership of the State Council.

Proceeds will go to;

• energy saving;
• clean transportation;
• clean energy;
• pollution prevention;
• ecological protection and adaptation;
• resources conservation and recycling.

The expected environmental impacts include the reductions of:

• 83,184 tce/year;
• 25,912 tone CO2 per year;
• 2,894 tone SO2 per year;
• 707 tone NOx per year.

External review: CECEP.  

Underwriter: Agricultural Bank of China, Donghai Securities, Bank of Nanjing, Bank of Luoyang.

Stop Press!

And here’s another green bond issued for AfDB in less than 2 weeks - this time it is a green Kangaroo bond!

The AUD 55m (USD 41.3m) issue was underwritten by Nomura and has a 3.5% coupon, with a whopping 15-year tenor.

The AfDB have been a regular green bond issuer since their inception bond in March 2010.

Well done for their tenacity!

Municipal bonds

City of Oslo NOK 2bn (USD 237.4m)

Norway’s City of Oslo came to market for the second time with a NOK 2bn green bond issued at the beginning of the month. At over USD 230m, the bond is the largest NOK-denominated bond issued to date and one of the larger bonds from the region.

The City Government selects eligible projects which comply with the categories listed in the Green Bond framework:

• Energy efficiency and sustainable buildings;
• Water management;
• Low carbon transport;
• Sustainable urban planning.

The bond has received a second opinion from CICERO.

The City has adopted the following targets for its climate and environmental policies:

• Direct greenhouse gas emissions should be reduced by 50 % by 2030, compared to 1991 level (equivalent to a reduction of 0.6 Mton CO2);
• All greenhouse gas emissions should be phased out by 2050.

Underwriters: Danske Bank, Nordea, DNB, SEB, Pareto Securities, SwedBank.

City of Mexico's inaugural green bond (MXN 1bn, USD 50m)

Last week, we reported that Mexico City became the first sub-sovereign issuer of a green bond in Latin America!

A few extra details:

The review from  Sustainalytics outlines the following areas as eligible for investment:

• Sustainable Transport;
• Sustainable Buildings;
• Renewable Energy;
• Energy Efficiency;
• Water Efficiency and Wastewater Management;
• Pollution Prevention and Control;
• Conservation and Biodiversity;
• Climate Change Adaptation.

The review also notes the following new and existing projects as potential projects to allocate funding towards:

• New and existing Mexico City Metro installation and repair;
• Existing light rail rolling stock;
• Existing Bus Rapid Transit construction and maintenance;
• New Water projects: collection, treatment, maintenance, stormwater management and drainage facilities;
• New LED street lighting.

While some of the areas identified in the framework would not be eligible for Climate Bonds certification (e.g. LEED Silver buildings), the projects identified for potential investment appear on initial research to meet guidelines.

Congratulations to Mexico – a hugely important first for the region!

And some great disclosure coming with it.

Underwriter: HSBC

City of Portland, Oregon’s USD 16.2m green bond

Oregon’s City of Portland has just issued its first green bond to finance LED street lighting.

The bond is part of the City’s strategy to meet its Climate Action Plan (CAP) to achieve a 40% reduction in carbon emissions by 2030 and an 80% reduction by mid-21^st century (1990 baseline).

This bond is financing the conversion of nearly 51,000 high-pressure sodium bulbs to energy efficient LEDs of the City’s outdoor lights. The expected benefits include a lower energy consumption as well as a decrease in maintenance costs. The project is expected to be completed by April 2018.

The City anticipates that the bond’s use of proceeds will save more than 28 million kWh annually, equivalent to a 77% reduction. An actual saving amount will be disclosed in future disclosure documents for a period of 5 years.

LED lighting is an easy win for city street lighting, enabling substantial energy savings with short pay back periods.

While it is disappointing that there is no external review or certification, this is not unusual for bonds of this small scale and we applaud the very detailed reporting in the prospectus.

Underwriter: Wells Fargo.

City of Vasteras, Sweden – SEK 750m (USD 81.2m)

The city of Vasteras issued its inaugural green bond for SEK 750m to support the municipality’s emissions reduction target of 60% by 2020. The green bond framework has received a second opinion from CICERO.

Eligible projects fall under the following categories:

• Renewable energy: solar, wind, bioenergy from forest and household waste and thermal energy;
• Energy efficiency: district heating/cooling, smart grids, energy storage and recovery;
• Sustainable transport: public transport, electric vehicles, bicycle paths, logistics leading to reduced carbon footprint from transportation;
• Low-carbon commercial and residential buildings: certified to LEED Gold, BREEAM very good or Miljöbyggnad silver; or renovations leading to a 35% reduction in energy use;
• Waste management: recycling, re-use, rehabilitation of contaminated land;
• Waste and wastewater management and
• Adaptation, biodiversity protection and nature conservation.

There is great detail in the review from CICERO which clarifies potentially problematic areas such as: the exclusion of peat as a feedstock for bio energy, the exclusion of fossil fuels for transport projects and the clarification that biomass feedstock will be forest and household waste only.

Further, buildings projects need to achieve a minimum of LEED Gold or equivalent which shows excellent ambition!

Underwriter: SEB

Other thematic bonds

Tokyo Government Issues AUD 125m (USD 93m) Test Ahead of Green Bonds

The Tokyo Metropolitan Government has issued AUD 125m bond to fund solar panels and the installation of LED bulbs in buildings owned by Tokyo. The bond was not marketed as ‘green’ but as a “Bond for Supporters of the Environment in Tokyo”.

The bond was sold to retail investors in the Tokyo area and is a trial bond before Tokyo offers green bonds.

While the proceeds will be used to finance green projects, we have not yet included it in our database as it does not meet the reporting and tracking requirements outlined in the Green Bonds Principles.

Dutch Development Bank (FMO) issued SEK 700m sustainability bond

Proceeds are used to finance green projects (renewable energy, efficiency and agriculture) and inclusive finance (responsible financial products and services by poor and vulnerable populations).

They have excellent reporting which can be accessed here and includes a full list of projects leant to through the use or proceeds. Approximately 86% of proceeds are lent to green projects and the remainder to inclusive finance projects.

Projects are located across the developing world including Tanzania, Peru and India.  

Underwriter: Danske Bank.

*We are proud to note that FMO is a partner of the Climate Bonds Initiative.

Cofinimmo’s Green and Social bond private placement(EUR 55m, USD 58m)

Belgian REIT Cofinimmo is a new entrant into the Market Blog with their has issued their first green and  socialbond.  

Proceeds will finance buildings meeting either an environmental goal (BREEAM Very Good minimum) or a social goal (e.g. healthcare, affordable housing etc.). 

The Second review was provided by Vigeo Eiris. 

Underwriters: Belfius, BNP Paribas and Degroof Petercam.

Bonds not yet aligned with international definitions and best practice

Jiangsu Guoxin Investment Co, RMB 200m (USD 28.9m) out

The bond proceeds will be used for four projects, including 2 wind farms projects and 2 projects “Replacing Small Units with Large Ones”. While wind farms are fine, the other 2 projects are linked to coal where smaller power stations are being replaced by larger ones.

Although replacing small coal-fired power stations with larger ones can improve efficiency and ‘clean coal’ projects are included in the PBoC’s green Catalogue, any projects relating to coal are excluded from our database.

Regular readers will know the reasons for this, but to briefly summarise Climate Bonds policy: given the rapid transition which needs to take place to stay within 2 degrees of warming all coal-fired power stations need to be replaced as soon as possible – any investment in coal is therefore not included because it extends life of coal based energy generation.  

Furthermore, projects relating to coal are not in line with what most international investors’ expectations of green.

Underwriters: Industrial Bank, China Development Bank Securities.

Bank of Urumqi, RMB 500m (USD 72.4m) green bond

RMB500 million will be used to finance projects and assets that are in line with PBoC’s Catalogue. Specifically, proceeds will go to three clean transportation projects, one energy saving project and one pollution prevention project.

Bank of Urumqi have provided two examples of the “typical projects” that will be financed. One is a waste management plant while the other is an urban railway station construction project.

While the other projects appear to be in line with our criteria, the station construction is problematic. The construction of the station includes 5 tunnels which are expected to reduce over ground car traffic flow around the station. ICE based infrastructure is not part of the Climate Bond Taxonomy though EVs and hybrids are. Furthermore, for station buildings to be included, they would have to meet energy efficiency criteria - there is no disclosure to indicate that this is the case.

Should further information arise which indicates that the station infrastructure will not support car travel, we will look at including the bond.

EY undertook the external review.

Underwriter: Bank of China.

Gossip

Nigeria to issue $63m of ‘Green Bonds’ in Q1 2017 with proceeds going to solar power, transport, forestry projects, reports Bloomberg.

We have spoken about Nigeria before, it’s good to see Environment Minister Armina J Mohammed is moving the project along.

Bangladesh green bond possible? And Former Bangladesh Bank Governor has emphasised the need for issuing green bonds to attract more foreign direct investment.

Kenya to Announce Green Bonds Policy in 2017.

Indonesia may be the next Asian country to enter the green bond market.

Cape Town plans to issue a Green Bond by June 2017.

Mumbai is planning its first green bond issuance on international capital markets.

Lagos (Nigeria) and Dakar (Senegal) also hope to launch municipal green bonds in 2017.

Sound Transit sells USD 477m in green bonds this week.

UK Local GovtFunds GBs in 2017?

Renovate America’s Annual Green Bond Impact Report has just been released.

Academic joins Climate Bonds Advisory Panel: Kwangyul Peck is President of South Korea’s Yonsei University Climate Finance Institute Co-Director, Yonsei (MIT Project on Climate and Economy).

Deutsche Kreditbank is given best Green Bond Rating by Oekom.

SEB's green bond list is out.

VanEck Plans Green Bond Fund.

India’s CRDA to tap capital markets by the end of 2017.

Ygrene to issue green bond ‘once a quarter’: Environmental Finance reports Renovate America's new $283.6m PACE bond/green ABS to close later in December.

Fibria: "If we decide to go for a new (dollar) bond it will be a Green bond,"says CEO Marcelo Castelli.

Modern Land says going “green” brings multiple benefits while only increasing overall cost minimally.

Brazil’s BNDES unveils $144m green bond fund for renewables.

EU Commission report on green bonds just released.

New IFCReport states that estimate climate-smart investment potential in selected sectors is:

• $1.3 trillion for Brazil from 2016–2030;
• $2.1 trillion for India from 2016 – 2030;
• $104 billion for Nigeria from 2016– 2030.

China: A specific 13th Five-year Plan on Wind Energy has been released. The plan includes a target for wind power to account for 6% of China’s power by 2020. This will require RMB 700bn (USD 100bn) annual investment and…they are looking for innovating financing models and reduced financing cost. 

For those who made it to the end, here is a listening treat – catch a 30-min podcast with our CEO here: http://www.bondbuyer.com/podcast/.

Also, a Christmas-themed chart for you all – happy festive season to all our readers.

See you in 2017!

The Markets team: Bridget, Camille, Alan and Caroline & the climate elves in Communications. 

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation. 

Is 2017 set to become the year of Sovereign Issuance?

Poland has just won the race to become the first ever sovereign to issue a green bond with a EUR 750m bond financing a range of climate-related projects.

The race to issue the first sovereign green bond was initiated by France when it announced, way back in April, that it would be issuing in 2017. We then had a series of announcements from Morocco, Nigeria, Sweden and Kenya all foreshadowing action next year.

Climate Bonds has six or seven countries listed in our notebook for issuance and Poland wasn’t part of that competition until just 2 weeks ago.

Now, surprise, here it is!

The bond details

Proceeds will finance and refinance projects that contribute to Poland’s progress in meeting its GHG emission reduction targets and promote the country’s transition to a low carbon economy.

A pre-issue demand of EUR 1.5 billion (from 91 accounts) allowed Poland's Ministry of Finance to increase the size of the issue to EUR 750 million.

According to the Green Bond Framework, the bond will finance:

• Renewable Energy generation and manufacture of components: wind, solar, tidal biomass
  
  • Waste biomass only
  • No biomass cogeneration in coal power plants will be included
     
• Clean Transportation: rail infrastructure new and upgrades, electric rolling stock etc.
   
• Sustainable Agricultural Operations: organic farming, more efficient farming methods
   
• Afforestation: new forests and forest and forest maintenance
   
• National Parks: conservation and restoration of natural habitat, educational activities to enhance awareness, encourage environmental care
   
• Reclamation of heaps: remediation of contaminated land, soil remediation

Specific exclusions: nuclear power, fossil fuel power and transportation, palm oil, hydro projects larger than 20MW, transmission infrastructure where >25% electricity is from fossil fuels.

A detailed review from Sustainalytics is available here.

How green is the bond?

For the most part, the detail provided is great. Both renewable energy and transport have clear and strong climate benefits and the clarification provided on biomass (waste only, no cogeneration with coal) and rail (no fossil fuel transport, electric rolling stock only) gives us a great deal of comfort around these assets and we welcome the level of disclosure.

Land use change through deforestation is a primary cause of climate change and therefore afforestation is a crucial part of keeping within two degrees of warming.

We do note however, that while forests store carbon, they are an unstable one, prone to forest fires, logging and changes in ownership. Keeping coal in the ground, on the other hand, is very stable and effective way to store carbon.  We hope that afforestation efforts will be complimented by equally diligent efforts to keeping coal where it now belongs. In the ground.

For sustainable agriculture, we’re uncertain what is meant by ‘more efficient farming methods’ but if this falls within organic farming and best practice in agriculture then there should be no issue.

National Park conservation, land remediation and reclamation are all valuable projects from an environmental perspective. We note that their climate impact (which is Poland’s stated purpose of the bond i.e. to finance projects that help it meet its GHG emission targets) is probably low but it will still have positive local environmental impacts.

Wider context

This is a green bond in the context that the assets are green and, as we’ve always said, green bonds are about green assets not green entities.

But it is worth remembering that Poland doesn’t exactly have an exemplary record on climate. Despite their attestation in the Green Bond Framework that the country “has increasingly become recognised as a progressive example among sovereigns transitioning to a low-emission economy”, Poland has an economic base in coal, a lukewarm attitude to EU climate action and a reputation for denying climate science and hampering climate negotiations.

So, we need to exercise some caution - highlighting small green projects while continuing to increase investment in much larger fossil fuel projects is something we will always call out. In this case, the positive environmental impact of the above projects will be completely negated by continuing investment in fossil fuels.

Poland has indicated that it will continue to be a coal nation and the ruling party has done little to change that perception.

A Just Transition in needed

We hope that this is the sign of a major shift in Polish policy to a low carbon and climate resilient economy.  We also recognise that there must be a just transition for workers and regions currently dependent on coal and this issue is wider than Poland, as Sharan Burrow and the ITUC keep reminding the world.

To the extent that this bond does mark a shift within Poland to building more green infrastructure, being productive at climate negotiations and transitioning to a low carbon economy – we will be unabashedly enthusiastic and supportive.

We will, however, continue to press the government for further plans to grow a pipeline of green investment and we expect investors to do the same.

This will ensure that this deal is not a one-off (or greenwashing) and that it brings increased scrutiny to Polands’ NDCs and energy policy, rather than deflecting attention from fossil fuel plans.

So:

Well done Poland for being the first!

Come on Poland, let this be the start of a much wider and deeper transition.

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation. 

Green bonds could play a key role in helping to finance the investment needed to achieve the EU's 2030 Climate and Energy objectives and the UN's SDGs

A few weeks ago the European Commission released“Study on the Potential of Green Bond Finance for Resource-Efficient Investments”, a comprehensive green bond report.

The report includes many positive recommendations on the potential of green bonds to help meet the EU’s 2030 climate and energy targets.

We like the focus on standards and public sector action to support further market growth. We’ve worked hard on science based quality and assurance measures and at the same time advocated for national and international polices to accelerate green issuance and avoid greenwashing.

These themes are explored in some detail, making the report and its associated toolkit a must read in our opinion.

Here are a few of our favorite takeaways:

Recommendation: Develop a European GB Standard that builds on Climate Bonds Standard and the Green Bond Principles

We are particularly excited about the recommendation to develop an official European Green Bond Standard. It is great to see the report recommending a clear standard that includes criteria for what projects qualify as green, as well as conditions for the issuance process.

We have long argued the benefits of a common green bond standard in the EU: standards help create an environmentally robust green bond market with minimal transaction costs.

The forward-looking recommendations don’t stop there.

The report proposes using existing market-led standards as the foundation for an official green bond standard. It explicitly highlights the potential to use the Climate Bonds Standard and the Green Bond Principles (GBPs) as the basis for the European Green Bonds Standard.

You’re probably not surprised to hear that we support that direction!

What makes it even easier for policymakers to implement this recommendation is that the Climate Bonds Standard fully incorporates the process guidelines of the GBPs, in addition to criteria for what is green: they are not two competing approaches.

The EU sets an example for other country-level GB standards around the world

Countries outside the EU should make note of this move towards a common green bond standard that builds on the Climate Bonds Standard and the GBPs.

The EU is the world's biggest economic zone, and emerging markets in particular can benefit hugely from aligning their country-level green bond standards against a future EU standard.

Common green bond standards can help reduce transaction costs, facilitating cross-border investment.

Beyond standards: public sector support to scale the GB market

We are also happy to see that a number of public sector support mechanisms are explored – and that they are very much aligned with our own work on the topic.

Basic recommendations include:

• Raising awareness of the benefits of green bonds (e.g. through a guide supporting the green bond market development targeted to national authorities);​
• Leading, establishing or joining a coordination mechanism with the main market actors (such as a Green Bond Market Development Committee);
• Collecting a list of planned green investments to support the development of a green project pipeline to support the supply of green bonds (e.g. through requiring such list from each Member State);
• Requiring mandatory disclosure of green indicators regarding bond issuances and investments (the recently released recommendations of the FSB task force on environmental disclosure should be of help).

Further recommendations: Innovative public sector tools

The report also highlights the potential for more innovative public sector tools (including tax incentives, altering risk weightings for green investments and getting central banks involved), although they are cautious here, highlighting the importance of considering potential unintended consequences to financial stability.

Some of these tools are already gaining support from other actors, such as the French Banking Association’s call for a ‘Green Support Factor’ to alter the risk weightings of green investments.

We have also seen a few central banks in emerging markets declare that they are investing some of their reserves in green bonds, most recently Morocco (last month). Bangladesh announced they have been investing foreign reserves in green bonds since 2015. 

We recognize some of these policy tools may be seen as controversial, but given the extreme urgency and scale of the climate change challenge, we believe it is necessary to consider the whole toolkit available to grow the market, from the basic recommendations to the more innovative options.  

Policies to scale up green bond markets should complement broader sustainable growth targets and efforts to deliver more stable financial systems that also address environmental risks and long-term value creation.

A final word

In response to the report, Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: 

“Promoting long-term and green finance is one of the priorities of the Capital Markets Union Action Plan. Green bonds are an important instrument to raise capital market finance for environmentally-friendly and more sustainable investments. The new High Level Expert Group on sustainable finance will help define steps towards greener capital markets.”

What’s next

We look forward to seeing the Expert Group in action in 2017, now that an excellent set of green bond recommendations is on the table.

We also applaud the cooperation between DG ENVIRONMENT that prepared the report and DG FISMA that will take the topic further under the Capital Markets Union.

Well done to the European Commission!

'Till next time,

The Policy team (with support of Communications)

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation. 

It’s almost Christmas and I have few last thoughts for you for the year:

In 2016 ….

1. We’ve had a whopper year for green bonds: by international definitions we’re at USD 79bn of green bonds in 2016; $91.5bn if we include the USD 12.5bn of China green bonds. We’ve seen green covered bonds, green mortgage-backed securities, green Schuldschein, green loans.
2. China’s G20 Presidency has made a big splash by promoting green finance and green bonds. Who would have thought we’d see Russia and Saudi Arabia signing off on official statements on green finance? Bravo China.
3. And we’ve seen the first countries explicitly link green bond plans to the delivery of national climate change plans (”NDCs”). Yes, that is exactly the way we need to go – we want to see the 2017 UN Climate Change Conference be all about capital raising plans that deliver those NDCs.

In 2017 ….

1. Temperatures in the Arctic Ocean are currently 20°C above normal, and has been for weeks. Ah, that’s a tough one to start with. In English we call that a “canary in the coal mine” - an early-warning signal of disaster. We are going to have to work a lot harder in 2017 to avert the catastrophe we’re heading towards.
2. We at least know it will be the Year of Sovereign Green Bonds, with some nine countries talking about issuing (Poland was the first to issue, just two weeks ago). We think we’ll also see Green City Bonds mushroom in emerging markets, retail green bonds flourish in China, the US and Switzerland, and corporate green bonds pop up everywhere from Indonesia and Thailand to Argentina and Colombia. It’s going to be big.
3. But will it be the year of incredibly ambitious green economic transition plans that we so desperately need to see? Vast mass transit systems; vast clean energy investments; and vast water infrastructure plans?

Well, China has started, and India too; more will follow. And we know we have more than enough capital, in fact more capital on the planet than ever before in history; that investors actually want green; and that rich world interest rates, despite some Trumpian speed bumps, remain the lowest recorded in history. Wow, doesn't that sound like the perfect time to green the world’s economy?

To energize this discussion we’re holding, on 6 March 2017, a Climate Bonds Conference, plus Green Bond Pioneer Awards – and we hope you can join us. It’ll be at the City of London’s gorgeous Guildhall. Just let me know if you can come.

2017 couldn’t have got off to a better start with the news that the much anticipated French Sovereign Green Bond issuance will begin its roadshow on the 6^th of January.

To be issued by the French Treasury, with a second opinion of the framework provided by Vigeo-Eiris (a Climate Bonds Approved Verifier), the euro-denominated offering will have tenors of between 15 and 25 years. 

Poland became the first sovereign green bond issuer in December 2016 (5 year, USD 750m), rounding off a year that saw record green bond issuance. This inaugural offering came as many other countries announced their sovereign green bond plans, including Morocco, Nigeria, Sweden and Kenya. This year is shaping up to be the year of sovereign green bond issuance.

As has been noted elsewhere, this second sovereign issuance sets a shining example for other governments planning a sovereign, both in terms of ambition and disclosure.

In terms of ambition, an interdepartmental working group has identified a staggering EUR 10bn of expenditure (from both the State budget and the Programme of Investments for the Future) as eligible for green bond allocation. More on this project evaluation and selection process can be found here (en français), but notable is that their selection uses France's TEEC label Taxonomy as guidance, which draws heavily on the Climate Bonds Taxonomy.

The level of disclosure is also very promising; the State will publish annually on the use of proceeds deployment and an ex-post environmental impacts of the financed projects. The former will be independently verified and the latter overseen by an independent Evaluation Council of international green finance experts who will define the reporting specifications / methodology in the coming months.

More analysis of this exciting bond will be included in our next Market Blog.

The wider context

The announcement of this French sovereign comes just one week after François Hollande delivered France’s long term emissions reduction plan to the UNFCCC, showing how they will meet their Paris Agreement transition to being a low carbon economy. The only other countries that have done this so far are Germany, Mexico, Canada - and the US (trying to lock in the incoming administration). We hope that these will now lead to (green) national capital raising plans to be presented at the next COP. One of the things we will be stressing throughout the coming year will be the vital role that sovereign green bonds can play in these capital raising plans.

The trends and implications of sovereign green bond issuance will be one of the many topics covered at our Climate Bonds Annual Conference on Monday March 6^th. So save the date; an invite to follow shortly. 

Wishing you all a very Happy New Year!

Climate Bonds Communications Team

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation. 

Climate Bonds CEO Sean Kidney has been appointed as one of the NGO representatives to the new European Commission High Level Group on Sustainable Finance, convened to “help develop an overarching and comprehensive EU strategy on sustainable finance to integrate sustainability in EU financial policy.”

The Group is comprised of 20 members drawn from NGO’s with experience in sustainable finance and policy development, pension funds, institutional investors and other financial organisations involved in green finance sustainability analysis.

Formation of the Expert Group was decided by the Commission on September 14^th  as a new priority in the Capital Markets Union (CMU) reform process. 

Christian Thimann, Group Head of Strategy, Sustainability and Public Affairs at AXA, has been appointed as Chairperson. Mr Thimann has recently served as Vice-Chair of the Financial Stability Board Task Force on Climate Related Financial Disclosures (FSB-TCFD).

The Group will work in two six month phases, initially examining a range of issues around green finance and then developing an integrated roadmap and prioritisation of possible measures that can be addressed through public policy, market measures or NGO/agency activities.

European Commission Vice-President Valdis Dombrovskis:

"We are committed to promoting sustainable finance in Europe. In appointing the members of our high level expert group, we have drawn on the best talent and expertise there is. They will ensure our approach to sustainable finance is ambitious and at the forefront of innovation. They will help us hardwire sustainability into EU financial policy."

Composition of the High Level Expert Group on Sustainable Finance:

The Last Word

Convening of the Expert Group follows release of the EC Clean Energy for all Europeans November 30^th  policy package and the December 2^nd Green Bond Finance for Resource-Efficient Investmentsreport that signalled policy directions to help accelerate green finance.

A positive trio of announcements from Europe to round off the year with. The Expert Group has its first meeting later this month; we’ll keep you appraised of developments.

Till next time,

Climate Bonds Communications

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.