This is an amazing job with: rethinking how we use policy, regulation and every finance sector tool – and capital markets tool – we have to mobilize capital for a rapid global transition to a low-carbon and climate resilient economy.

It will involve looking at:

• Growing the global market for green financial instruments
• Capital markets policy proposals for economies around the world
• What regulators can do to grow green finance

Green bonds are the focus, as an indicator of success and creating momentum for change.

The job is London-based; for this one we’re looking for someone who has a working visa or a UK passport. Self-starting, hands-on, motivated individual, etc, and able to work in a small but potent organisation. Reporting to me (lucky person).

They’ll be:

• Driving the policy development programme
• Developing and managing relationships with public sector stakeholders
• Promoting our policy work at external events

There’s a small team to managing, along with a vast agenda. Country-specific policy work includes China, the EU, the US, India, Brazil, Nigeria.

The blurb:

The Climate Bonds Initiative is a fast-growing, investor-focused international non-profit working to mobilise the USD100 trillion global bond market for climate change solutions. Our main work involves proposing and promoting measures relating to capital markets that will support capital flows to climate change solutions. We also do market education work, data and market analysis, standards development and a certification programme. Policy analysis - and advocacy – is central to our market development work.

Key Tasks

• Further develop existing research programme around policy and regulation reforms to scale up green bond markets in emerging markets and developed economies
• Liaise with governments, regulators, central banks, development banks and other public sector stakeholders, as well as the private sector and NGOs.
• Present and push for research findings and reports to be put into practice by relevant public sector actors
• Manage small policy development, tracking and review team
• Coordinate with senior management on long-term planning and strategy around mobilising capital for climate change solutions
• Input into strategy for development of the organisation


Qualification and Experience

Essential

• Experience in senior levels of policy development and advocacy
• Experience with capital markets
• Knowledge of environmental issues, climate change, climate finance
• Proven leadership skills
• Proven ability to manage small teams, coordinate and prioritise across multiple projects
• Excellent presentation skills
• Proficiency in English

• Eligible to work in the UK

Desirable

• Experience working with small NGOs
• Good knowledge of capital markets policy and regulation issues
• Understanding of multiple jurisdictions, including larger emerging markets

Next steps

Remuneration: we’re not a bank but an NGO. You won’t make a fortune; but the opportunity to influence the direction of the world’s economy is extraordinary.

More information on the Climate Bonds Initiative can be found here.

Applications <Claire.Berson@climatebonds.net> quoting “Policy Director” in the subject line. 

Australia’s emergence as an example of international best practice has been bolstered by Commonwealth Bank of Australia (CBA) announcement of a AUD 650m Certified Climate Bond.

All four of Australia’s major banks have now issued Certified Climate Bonds, a status unmatched in any other advanced economy financial sector.

What’s it all about?

At AUD 650m (USD 496m), the new Commonwealth Bank Climate Bond is one of the largest to date from Australia. Proceeds will fund 12 clean energy and low-carbon projects in Australia including renewable energy generation through solar, wind, energy efficient buildings and low-carbon transport projects.

It will be reviewed regularly by the bank internally, and by Ernst & Young (EY) who will provide an independent review against the Climate Bonds Standard annually until the bond matures in February 2022. 

Support from CEFC

The Clean Energy Finance Corporation (CEFC) has taken a cornerstone AUD 100m investment. This is a continuation of its role in supporting the establishment of the domestic market, having acted as a cornerstone investor for five of the 11 Australian climate bond issuances to date.

Green Bonds in Australia

Despite is relatively small sized market, Australia now has a diverse range of green bonds, with multiple issuance from the national four biggest banks, two state governments, a property developer, a leading tertiary institution and several certified green ABS.

More certified bonds are in the pipeline.

The List

Climate Bonds Certified issuance:

• NAB Dec 2014 AUD 300m (Solar and wind)
• ANZ Bank May 2015 AUD 600m (Low Carbon Buildings Wind, Solar)
• Flexigroup April 2016 AUD 50m (Solar)
• Westpac Bank May 2016, AUD 500m (Multisector)
• Treasury Corporation of Victoria (TCV/Victorian Govt) July 2016 AUD 300m (Multisector)
• Monash University Dec 2016 AUD 218m (Multisector).
• ​WestpacFeb 2017 AUD 64M (JPY5.6bn) to Meiji Insurance in Japan ​ (Low Carbon Buildings, Clean energy) 
• FlexiGroupFeb 2017 AUD50M (Solar) 
• NABFeb 2017 EUR500M (Solar and Wind) 
• Queensland Treasury Corp (T-Corp/Queensland Govt Feb 2017 AUD750M (Low carbon transport and clean energy) 
• Commonwealth Bank of Australia March 2017 AUD 650m (Multisector)

Uncertified Issuance:

• StocklandOct 2014 EUR 300M (low carbon property)
• ICG (Hallet Hill No2) Oct 2015 AUD 205m (wind)

Who’s saying what:

Simon Ling, CBA Managing Director Debt Markets:

“We are really pleased with the positive response from local and international investors.”

“Increasing investor awareness and sophistication will fuel demand for climate bonds, and based on the strong pipeline for renewable and low-carbon projects we expect to see this growth increase in the next five years in the Australian market. We are committed to leveraging our expertise and scale to support the growth of climate bonds, directly and for our clients.”

Sean Kidney, CEO Climate Bonds Initiative:

“The Commonwealth Bank climate bond marks a significant step for green finance globally, as institutional investors and pension funds will take note of one of the world’s largest banks entering the climate bond market with a best practice example of market standards and issuance.

“Active leadership from a major bank like Commonwealth Bank sends a strong signal that green bonds have an increasing role in funding new infrastructure, clean energy and helping nations finance their climate action plans.”

“Australia now has the distinction of being the only nation in the world where almost every green bond issued has been certified by the Climate Bonds Initiative. This reflects a strong adherence to international best practice from the domestic finance sector and is a positive example for other nations and markets.”

Local investors could do more  

Australia is uniquely placed. We commented in December, when Monash University issued their Climate Bond, on the enormous potential advantages and regional directions that are open to the domestic finance sector in climate finance.

We’ve also urged local retirement funds and asset managers in the fast growing AUD 2.2tr retirement sector to be more active in seeking more green products and opportunity,  from both domestic and international sectors.

The big four banks becoming green issuers is a further signal. As are the continuing steps being taken by regional neighbours.

If Australian Banks Can…

Australia is the 13^th largest global economy, and its four largest bank by market size are amongst the biggest in the world, sitting well inside the top 100 rankings.

Similar action from the largest equivalent banks in G20 or Eurozone nations, progressively issuing green bonds, would accelerate the global market.

Climate finance would be taking a vital step from policy papers and investor statements to real economy implementation and reaching the USD 1 trillion by 2020 green bonds goal.

A lead role from the banking sector in helping countries deliver on NDC commitments is consistent with many of the broad directions being advocated by Climate Bonds and others.

It’s also a role backed by an plethora of reports and findings at an international level, including the G20 Green Finance Synthesis Report and statements from Bank of England Governor Mark Carney, amongst many others.

The Last Word - Aussie banks can take a bow

Australia’s big four banks including the Commonwealth can take due credit.

Despite national political recalcitrance and vacillation on climate policy, over the last three years they’ve led the local market towards global best practice while making benchmark size issuances.

More of the Top 100 banks should be taking note. No one can say it's not being done. 

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

A decision to invest in any financial product is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment any individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part, on any information contained within this, or other Climate Bonds communications.

Nairobi launch marks start of three year program to build green bond capability in Kenya and East Africa

What’s it all about

The Kenya Bankers Association (KBA), Nairobi Securities Exchange (NSE), Climate Bonds Initiative (CBI) and Financial Sector Deepening Africa (FSD Africa) in conjunction with the Dutch Development Bank FMO and the International Finance Corporation (IFC) have today launched Kenya’s Green Bond programme.

The programme, which is coordinated by KBA under its Sustainable Finance Initiative (SFI), is endorsed by the Central Bank of Kenya (CBK), Capital Markets Authority (CMA) and the National Treasury.

During the launch, KBA, the NSE, FSD Africa and CBI signed a Cooperation Agreement to support the development of a green bonds market in Kenya. 

Funding from FSD Africa & FMO 

FSD Africa has committed USD 600,000 over a period of three years, to fund the programme with the objective of aiding KBA to be in a position to tap the growing investor demand for green investments.

Through the partnership and funding from FSD Africa, a technical support programme will be implemented that will enable the Association to carry out research to explore the potential and capacity for green bond issuance in Kenya.

In addition, it will enable the development of a community of Kenyan-based licensed verifiers and support KBA’s efforts in building capacity locally to catalyze similar programmes across East Africa. 

In addition to the FSD Africa funding, FMO had earlier committed USD 350,000 to support KBA develop the framework to create the industry’s first pooled green bond facility. The facility that would allow KBA member banks, especially Tier 2 and Tier 3 banks, and corporates to take advantage of wholesale debt capital markets.

The launch of the Kenya Green Bond Programme comes at a time when African countries are gaining momentum to align with the burgeoning activity within the green finance space.

Kenya, Nigeria, Morocco, Egypt and South Africa are among countries that have made strides to establish standards, harmonize public and private sector efforts as well as build capacity within the green economy.

Who’s saying what:

Habil Olaka, CEO of Kenya Bankers Association:

“We are very pleased and excited to announce this partnership. This alliance has given us the opportunity to work closely together as a sector in developing Kenya’s green finance market through the green bond programme.

“One of KBA’s main objectives is to develop and sustain best practices that will inevitably strengthen financial structures in Kenya. FSD Africa, FMO, IFC, CBI and the NSE have all focused over the years on growing sustainable finance practices in the financial sector and this strongly complements our objective.”

Geoffrey Odundo, Chief Executive of Nigeria Stock Exchange:

“The Exchange is committed to developing a vibrant green market for this region; we aim to create an environment that will allow the market to prosper in a secure and transpar­ent way. Through the NSE, issuers and investors will have a platform where they can come to­gether and fulfil their green objectives. The Kenya Green Bond Program is an innovative tool that will promote economic and climate resiliency for our country.”

Mark Napier, Director of FSD Africa:

“It is expected that this programme will improve access to a complementary source of longer-term capital alongside traditional, shorter term bank loans, while contributing to the financing of ‘green’ investments and improving the environment. “

“It will further support the national agenda that seeks to reinforce Kenya’s role as a regional leader in financial services as articulated by Vision 2030 and Kenya’s Green Economy Strategy and Implementation Plan (GESIP).”

Jurgen Rigterink, Chief Executive Officer of FMO:

“FMO is committed to develop and strengthen the green bonds market in Kenya with a vision to positively impact economic growth in the country. We are very enthusiastic to be part of the sustainable revolution in Kenya and being able to contribute in substantive sustainable ways towards improving environmental and social responsibility, and sustainable business practices.  In addition, FMO is glad to see how the Green Bond Program builds on the Sustainable Finance Initiative, the banking sector initiative which FMO was also proud to be part of.”

Sean Kidney, CEO of Climate Bonds Initiative:

 "We are very excited to be able to work with our partners to grow a green bonds market in Kenya. This is going to be part of delivering lower cost capital to green projects, and developing capital markets in Kenya. 

“In this 'year of sovereign green bonds' Kenya is taking action and issuing will enhance its leadership positioning in Africa and provide a positive example to other nations looking for climate finance options."

(Watch Sean Kidney’s video opening to the launch here, 1m 20s)

The Last Word

Fostering green finance capabilities in emerging economies is integral to the success of country climate action plans. Doing so is an important part of working towards the emissions goals agreed in NDC commitments at COP21.

The Kenya Green Bond Program has just taken a big step along that COP21 NDC path.

Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

A decision to invest in any financial product is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment any individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part, on any information contained within this, or other Climate Bonds communications.

The bundling of green loans into securities can unlock additional capital to finance the transition to a low carbon and climate-resilient economy.

Opportunities now exist across the EU to grow a significant market around green securitisation and contribute directly to 2030 energy and carbon reduction targets.

[Diary Alert: Brussels: Green Securitisation Roundtable: April 24^th– Details to come.]

Securitisation and green assets-What’s it all about?

Securitisation is a potential financial tool for the aggregation of multiple small-scale, low carbon and climate-resilient assets into green investible pools.

Loans for small-scale low carbon projects, such as energy efficiency upgrades, rooftop solar PV and electric vehicle leases, which on their own are too small to gain access to the bond market, can be aggregated and securitised into larger pools to access institutional investor capital.

This process also gives banks and other primary lenders an opportunity to refinance loan existing portfolios and use the capital to create a fresh portfolio of green loans.

Reviving securitisation in the EU

The securitisation market in Europe performed better than the US during the crisis, but has yet to fully recover. A revitalised market could mean more opportunity for green growth.

In a recent speech in Berlin, European Commissioner Vice President Dombrovskis pressed the importance of:

 “...the European Parliament and Council to reach swift agreement on our definition of simple, transparent and standardised securitisation – and to adjust capital requirements for those who invest in them.”

As part of its efforts to develop a Capital Markets Union, the European Commission has proposed:

• A Regulation on Securitisation laying down common rules including due diligence, risk retention and transparency, and creating a framework to identify simple, transparent and standardised (STS) securitisations​
• An amendment to the Regulation on Capital Requirements to make the capital treatment of securitisations more risk-sensitive and reflect STS securitisations

These issues have been tackled at the international level by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commission (IOSCO) but an agreement is still to be reached amongst the EU institutions.

Simple, Transparent, Standardised and Sustainable securitisation?

Though the simple, transparent and standardised (STS)  framework does not specifically refer to green assets, the High Level Expert Group on sustainable finance (HLEG) is poised to advise on how to integrate sustainable elements into the Capital Markets Union reform process.

Its Interim Report will be published to coincide with the G20 leaders meeting in June this year.

The value of continued green finance momentum at both EU and G20 level should not be underestimated.

Greening the EU Market

Our recent policy paper, ‘Public sector agenda for stimulating private market development in green securitisation in Europe,’ published in collaboration with the Centre for Climate Change Economics and Policy at the London School of Economics, points to actions for policymakers to scale up green securitisation in Europe to help meet the EU’s 2030 energy and climate targets.

Its focus is on practical measures to improve access to capital and lower costs of capital for green projects while maintaining adequate risk and transparency frameworks.  

A first step would be to develop guidelines for green assets and green tagging tools to facilitate the identification of loans eligible for green securitisation.

Green Tagging

The European Mortgage Federation and European Covered Bond Council are already taking further steps into this direction and have launched an Energy Efficient Mortgages Initiative to develop a standardised energy efficient mortgage based on preferential rates.

The case for better treatment a preferential approach rests on the idea that energy efficiency measures give borrowers more disposable income, improving their credit profile, and make properties more valuable.

The Obvion Green RMBS Example

Along these lines Dutch-based Obvion issued the first green Residential Mortgage-Backed Security, under the Climate Bonds Standard.

The bond, issued in June 2016, for EUR 500m (USD 557m), was backed by a pool of green residential mortgages based on Dutch energy performance labels for private homes.

Green Synthetic securitisation?

A recent deal from Crédit Agricole showed the potential for synthetic securitisation to free up regulatory capital for green investments.

The evolving STS securitisation framework only covers true-sale securitisations; however, a proposed amendment of the Capital Requirements Regulation introduces the application of STS risk weights to specific balance-sheet synthetics. Could this provide another opportunity for increased green investment?  

The Last Word

Asset-backed securities have been under scrutiny since the financial crisis.

In the green space, some positive signs of growth now are emerging with multiple transactions from the US, China and Australia.

Climate Bonds latest estimates, prepared in a Briefing Paper for our March Annual Conference, show around USD 5bn (6% of market share) of green securities issued in 2016 were asset-backed securities (ABS), up from USD 1.9 bn in 2015.

Green securitisation doesn’t excite the sort of attention that other parts of the climate finance agenda do.

Yet it could be one of the most effective potential means to harness small scale developments like residential rooftop solar, EV leases and small SME loans for energy storage projects.

Room to grow 

The OECD estimates that annual issuance of green asset-backed securities could reach between US$280-380 billion (or between 44-52% of annual issuance) by 2035 for renewable energy, energy efficiency and low-emission vehicles financing alone (in a 2 degrees scenario).

Examples like Obvion in the EU and further afield, Toyota in the US and Flexigroup in Australia show what can be done.

Our report is one of many moving parts that could see the EU lead on the global development of green securitisation, embedding policy reforms and then supporting green securitisation initiatives in other markets as a part of global climate finance and sustainable investment directions.

We’re happy to help.

Till next time,

Climate Bonds

PS: For the Diary – Brussels Roundtable April 24th 

A roundtable on green securitisation to discuss these issues will be hosted by the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) in Brussels on April 24^th– more details to follow!

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

A decision to invest in any financial product is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment any individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part, on any information contained within this, or other Climate Bonds communications.

China’s central bank briefs LATAM finance officials & development banks on green finance & green bonds: With a bonus presentation from Sean Kidney

By our new Climate Bonds China staffer, Ivy Lau

Meeting in Beijing

In the headquarters of China’s central bank on Beijing’s Chang’an Avenue, a delegation from Latin America countries filled the boardroom early this week, seeking a briefing on China’s experience in developing a green bond market and green finance.

Fuelled by China’s commitment to the UN Paris Agreement, development of green finance has become a top agenda item for Chinese policymakers.  China’s Green Bonds market last year went from zero to hero (it’s now the largest in the world!), making China an intriguing exemplar of financial activities going green.

During the briefing, senior officials from the People’s Bank of China (PBOC) and other regulators showcased China’s approach to green finance, and discussed how it’s been dealing with challenges that have arisen.

Yin Yong, Deputy Governor of PBOC, and Ma Jun, Chief Economist of PBOC Research Bureau were the lead speakers.

Ma Jun noted that:

“Green bonds already make up 2% of Chinese bonds, whereas globally the figure is less than 0.2%. But the potential is huge, because 20% of investments in China need to be green to meet our national objectives. So we expect the green bond market to continue to have very strong growth.”

Ma Jun said that China’s green ambitions will need international as well as domestic capital. There are some differences between Chinese green definitions and international accepted definitions due to China’s urgent air pollution priorities, but about 90% are common.

That means that overseas investors can choose from a large portion of Chinese green bonds that are internationally recognized,

China Banking Regulatory Commission’s Ye Yenfei presented on their Green Credit Guidelines; the head of PBOC’s Financial Markets Division, Cao Yuanyuan, explained the PBOC’s green bond regulations. 

Climate Bonds CEO Sean Kidney provided an update on global green bond markets and practice.

Sean Kidney said he expected 2017 to see: “a lot of international collaboration. We have seen commitment from the EIB and China Green Finance Committee to look at harmonization of green bond guidelines between EU and China, and we will see this year the growth of bi-lateral green finance agreements.”

He also noted that green bond issuance opens the door to other sorts of green finance initiatives. “In the end, it’s not just fixed income we need, but equity, bank lending and sovereign support. Green bonds are just the start.” 

 The LATAM Delegation

Led by the InterAmerican Development Bank, the LATAM delegation is made up of representatives of national development banks from Latin America and the Caribbean, including from Argentina, Brazil, Chile. Peru, Brazil, Colombia and Mexico, as well as a smattering of regulators. It is spending a week visiting green finance organisations in Beijing and Shanghai.

Representatives of the delegation said that Latin America aims to strengthen its partnership with China in supporting climate related financial activities.  In terms of green bonds, members of the delegation were very keen to learn more about implementations of green bond standards, regulations, fiscal incentives, risk management and certification.

It was a lively Q&A.

Look soon for more on the spot China updates from Ivy,

Till next time,

Climate Bonds

中国人民银行与拉丁美洲财金官员及开发银行就绿色金融进行交流 + 肖恩．基德尼向代表团介绍全球绿色债券市场最新情况

作者：气候债券倡议组织．刘欣欣

于北京举办会议 

本周初，座落於北京长安大街的中国人民银行总部迎来专程访华丶由拉丁美洲及加勒比地区多国政府部门高层组成的代表团，他们齐集中国人民银行会议室，期望就中国发展绿色债券市场及绿色金融监管的经验，向中国人民银行及监管部门借鉴。

中国全力支持联合国《巴黎气候协议》，发展绿色金融已成为政策制定当局的首要任务。去年，中国绿色债券市场突飞猛进（目前已成为全球最大市场！），为全球金融活动迈向绿色发展提供重要参考。

在这次的知识交流中，中国人民银行及金融监管机构的高层官员向代表团展示了中国发展绿色金融的举措，并就中国如何应当中挑战进行了讨论。

交流会的主要演讲者包括中国人民银行副行长殷勇和中国人民银行首席经济学家马骏。马骏表示：「目前，绿色债券占到了中国债券市场总份额的2%，但从全球范围来看，这一比例要小于0.2%。中国市场的发展潜力仍然很大，因为只有当绿色投资额占到全国投资总额的20%时，我们才能满足国家绿色发展目标。所以我们期待绿色债券市场继续彰显强有力的增长势头。」

马骏又说，中国发展绿色金融同时需要国际和境内资本的配合。目前，中国的绿色定义与国际认可的绿色定义存在一些差异，主要体现在防治大气污染方面，但是90%左右的内容是一致的。这意味着国际投资者还是可以投资於绝大部分由中国发行人发行并符合国际认可定义的绿色债券。

接着，中国银监会政策研究局巡视员叶燕斐向代表团讲解《绿色信贷指引》，而中国人民银行金融市场司发行处处长曹媛媛则向代表团说明绿色债券规定。此外，气候债券倡议组织首席执行官肖恩．基德尼（Sean Kidney）向代表团介绍全球绿色债券市场与实践的最新情况。

肖恩．基德尼表示，预期2017年可以看到很多国际层面的协作。「我们已看到EIB与中国金融学会绿色金融专业委员会承诺推动欧盟与中国之间绿色债券标准一致化的研究。今年更多双边绿色金融协议可期。」

他说，绿色债券发行开启了通向其他绿色金融倡议的大门，「最终，我们不只需要绿色定息产品，还需要有绿色股票丶绿色信贷，以及主权基金支持绿色资产配置。绿色债券只是开端。」

拉丁美洲及加勒比地区代表团

由美洲开发银行牵头，拉丁美洲及加勒比地区代表团成员包括来自阿根廷丶巴西、智利丶秘鲁丶巴西丶哥伦比亚及墨西哥的国家开发银行及监管机构代表。代表团访华行程为期一周，期间参观了北京及上海的绿色金融机构。

代表团发言人表示，期望未来拉丁美洲与中国加强夥伴关系，以支持应对气候变化的相关金融活动。於交流过程中，代表团对中国绿色债券的标准制定丶相关法规丶政府激励措施丶风险管控及债券认证等方面的发展经验尤其关注，在答问环节中踊跃提问。

刘欣欣将呈现更多关于中国的更新报道

敬请期待下次更新

气候债券倡议组织

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

A decision to invest in any financial product is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment any individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part, on any information contained within this, or other Climate Bonds communications.

We are at full force this month with events nearly everywhere... Reinforcing our work in Europe, and spreading the message in the US, Canada, Hong Kong and Thailand.

Check where you can catch up with one of the Climate Bonds team for a one on one chat about green finance.

April 2017 Events

'Till next month,

Climate Bonds Initiative

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.

CDL issues Singapore’s first climate certified green property bond: Boost for sustainable development in major Asian centre.

Singapore-listed international real estate operating company leads again, this time best practice in green finance.

What’s it all about?

CDL, through its wholly-owned subsidiary, CDL Properties Ltd (CDLP), has issued Singapore’s first green property bond Certified under the Climate Bonds Low Carbon Buildings (LCB) Criteria.

As one of Singapore’s largest companies by market capitalisation, City Developments Limited’s (CDL) inaugural green bond issuance paves the way for other Singapore firms to tap into the fast-growing green bond market to finance green building projects and sustainability initiatives.

Proceeds of the SGD 100m (USD 70.7m) Climate Bonds Certified issuance will be allocated to the repayment of a SGD 100m loan extended by CDL to CDLP which owns Republic Plaza, one of Singapore’s tallest skyscrapers and a premium Grade A office building in the heart of Singapore’s Central Business District.

Since its completion in 1996, Republic Plaza has continuously been upgraded, including the major retrofitting of chiller plants and installation of energy efficient lighting to improve the building’s energy efficiency.

Thirty three (33%) emissions reduction

The combined impact of the retrofit and upgrades is an estimated 33% reductions in emissions. KPMG provided verification against the Climate Bonds Standard and Sustainalytics provided a second party opinion.

Climate Bonds Certification of Singapore green property bonds has been available since Climate Bonds released the emissions performance trajectory for Singapore commercial office buildings in April 2016 based on data provided by Singapore’s Building and Construction Authority.

Who is CDL?

CDL is a Singapore-listed international real estate operating company with a global presence spanning 97 locations in 26 countries.

Globally, CDL has developed over 40,000 homes and is one of Singapore's largest commercial landlords, with one of the biggest land banks amongst Singapore private-sector developers.

With a long-standing commitment to sustainability and climate action, CDL has received international recognition for its sustainability initiatives and it was one of the first Singapore companies to align its material issues to the United Nations Sustainable Development Goals (UN SDGs) launched in September 2015.

Who’s saying what:

Mr Sherman Kwek,  Deputy Chief Executive Officer CDL:

“Green finance offers us an alternative financing stream. There is an increased interest in socially responsible investment and a growing demand for relevant products.”

“CDL’s inaugural green bond, also the first by a Singapore company, links our sustainability initiatives with the capital markets, and enables us to tap on investors who are supportive and appreciative of the green building efforts at our flagship building – Republic Plaza.”

 “CDL’s green bond issuance also complements the Singapore Government’s target of greening at least 80% of the country’s building stock by 2030, which could potentially be the lynchpin of Singapore’s climate pledge to reduce its Greenhouse Gas (GHG) emissions.”

“It is clear that for the next 13 years, real estate companies have a large role to play in mitigating climate change, to contribute to Singapore’s greening and GHG emissions reduction goals. We will explore future green bond issuance to fund potential retrofit projects.”

Sean Kidney, CEO Climate Bonds Initiative:

“This Climate Bonds Certified issuance is another tangible reflection of CDL's leadership in the property sector, already demonstrated by its long-term environmental objectives and commitment to sustainability principles and action.”

 “There is enormous potential to improve the emissions and energy performance of commercial property within the major global conurbations. Investors and developers must drive the greening of commercial building stock towards a zero emissions target.”

 “The Republic Plaza Green Bond by the CDL Group is a leading example of what is possible with retrofits and upgrades to existing commercial building stock and will garner well-deserved attention from within Singapore and from wider Asian and Australian property markets for its best practice and innovation in green finance." 

Tell me more about the Low Carbon Buildings Standard:

The Low Carbon Buildings Criteria (LCB) is a sector specific  investor-screening tool that applies emissions performance criteria to assess whether bonds issued to fund commercial buildings, residential buildings, and upgrade/retrofits deliver a robust level of environmental performance to qualify for Climate Bonds Certification. 

The LCB Criteria sets out what property assets are eligible for certification under the Climate Bonds Standard and covers three different types of property assets:

• Commercial buildings: Buildings must be in the top 15% of their city in terms of emissions performance, with an added ambition of zero carbon by 2050.

• Residential buildings: Existing instruments such as local building codes, energy rating schemes (e.g. US Energy Star) and energy labelling schemes (e.g. Energy Performance Certificates in the UK) are leveraged as proxies for the top 15% of buildings in a local market.

• Upgrade projects: Building improvements that achieve emission reductions of 30% to 50% (depending on bond term) from a business-as-usual baseline will qualify for certification.

To qualify for Climate Bonds Certification, an individual property bond will have to satisfy emissions performance targets that depend on the issuance date and term of the bond.

Certification using the emissions performance trajectories complements the certification pathway available to issuers through significant upgrades and retrofits.

How do emissions performance baselines apply in Singapore?

In April 2016, the Climate Bonds Initiative released the key emissions performance figures that allows green bonds to be issued for office building assets in Singapore.

Using data supplied by Singapore’s Building & Construction Authority (BCA), the Climate Bonds Standard established an emissions performance (carbon intensity) figure for the top 15% of commercial offices buildings in Singapore which sits at 26.4kgCO2/sqm.

This figure now forms the baseline for assessing property bonds against the Climate Bonds Low Carbon Building Standard. 15% of commercial office buildings in Singapore comply initially, with the hurdle rate getting a little tougher every year towards the objective of achieving zero carbon emissions by 2050.

Other Certified LCB Green Property Bond Issuers:

In June 2015 ABN Amro was the first organisation to issue a green bond that included certification for commercial property under the LCB Criteria.

Recently-certified green bonds funding assets and projects that include the LCB Criteria:

• Treasury Corporation of Victoria (TCV), July 2016, AUD 300m (Multisector)
• Obvion, June 2016, EUR 500m
• ABN AMRO, May 2016, EUR 500m
• Westpac, May 2016, AUD 500m (Multisector)
• Axis Bank, May 2016, AUD 500m (Multisector)
• Obvion, June 2016, EUR 500m
• Monash University Dec 2016  AUD 218m (Multisector)
• NY State Housing Authority Jan 2017 USD 56m
• ​Westpac Feb 2017 AUD 64m (JPY5.6bn) to Meiji Insurance in Japan ​ (Low Carbon Buildings, Clean energy) 
• Commonwealth Bank of Australia March 2017 AUD 650m (Multisector)
• Investa March 2016AUD150m (Low Carbon Buildings) 

​

The last word

CDL provides a glimpse of the corporations of the future. A focus on long-term value creation, climate awareness, emissions reduction and a host of sustainability measures including being one of the first Singapore companies to align its material issues with the UN Sustainable Development Goals mark it out as a leader.

We couldn’t think of a better flagship company to launch our first certified property bond direct from a major South East Asian location. 

Well done!

‘Till next time,

Climate Bonds Communications

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

A decision to invest in any financial product is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment any individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part, on any information contained within this, or other Climate Bonds communications.

Brussels, 2-4 PM, April 24th

What’s it all about? 

Opportunities now exist across the EU to grow a significant market around green securitisation and contribute directly to 2030 energy and carbon reduction targets.

The bundling of green loans into securities can unlock additional capital to finance the transition to a low carbon and climate-resilient economy.

You’re invited to join us in Brussels for a participative Roundtable to discuss the role of green asset-backed securities in climate finance and what’s next to build green investment.

In order to attend please register here.

Who should attend? 

Policymakers, regulators, market participants including banks investors, credit agencies and climate NGOs.

Green Securitisation Roundtable: Brussels 

When: Monday, April 24th 14:00-16:00

Where: Thierry Stoll Auditorium, Rue de Spa 2, 1000 Brussels, Belgium

Agenda Themes:

• The challenge of financing green projects and assets
• The opportunity of aggregation for small-scale projects
• Options for Europe to grow a green securitisation market

Speakers: 

• Nick Robins, UNEP Inquiry 
• Max Bronzwaer, Obvion (Rabobank's mortgage lender) 
• Sebastian Godinot, WWF
• Luca Bertalot, European Covered Bond Council / European Mortgage Federation
• Michael Wilkins, S&P Global Ratings 
• Joop Hessels, ABN AMRO 
• Sean Kidney, Climate Bonds Initiative

Spaces are limited, please register here.

Where can I find more information? 

1) Green Securitisation: unlocking finance for small scale projects:

2-page policy brief prepared for Climate Bonds Annual Conference (March 2017).

Download here.

2) Green Securitisation & Climate Finance:

Climate Bonds Update (April 4th 2017).

Available here.

3) Public sector agenda for stimulating market development in green securitisation in Europe:

Joint report between the Centre for Climate Change Economics and Policy at the London School of Economics and Political Science (LSE) & the Climate Bonds Initiative (February 2017).

Announcement here.

Download full report here.

Still interested?

Register here.

We’ll see you in Brussels!

Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative publicly communication,.

Beijing-Green Finance Summit: Launch of China Local Government Report-Green Bonds Growth Policies 

Annual China Green Finance summit in Beijing was the backdrop for debut of 'Study of China’s Local Government Policy Instruments for Green Bonds' report.

Prepared by Climate Bonds & Syntao Green Finance, the new report examines green bond developments at a local government level and sets policy recommendations for growth.

What’s it all about?

Released to coincide with the China Green Finance Committee annual conference held over last weekend in Beijing, Study of China’s Local Government Policy Instruments for Green Bonds (中国地方政府绿色债券 激励机制研究) is the most detailed analysis of regional and city based green bond policy and issuance in China produced to date.

Taking as its starting point the rapid growth in Chinese green bond issuance from almost zero in 2015 to RMB 238 billion (USD 36.2 billion) or 39% of global issuance in 2016, the report outlines the policy steps taken by Government regulators and stock exchanges in supporting such rapid growth.

Beijing Green Finance Summit reflects green growth

More than 500 green finance experts from regulators and industry gathered at the annual Green Finance Summit on Saturday, the surging number of attendees reflecting the increased attention being placed on greening the financial system.  

The Summit has been held annually since 2015 by the China Financial Society Green Finance Committee which operates under the auspices of the PBoC.  

Major issues on the agenda this year included:

• opportunities and challenges facing green credit and green bond markets;
• establishment of green financial systems at a local level;
• innovation in green financial products

Keynote Summit Commentary 

Keynote speaker Chen Yulu, Deputy Governor of PBoC, acknowledged that China’s development in green finance has made enormous progress in 2016, which included enhancement of policy framework, expansion of funding channels and continuous green credit growth.  

As of February 2017, green credit assets of 21 major Chinese banks reached RMB 7.5 trillion, accounted for 8.8% of the total outstanding loan. 

Chen Yulu also noted some of the challenges facing China’s budding green finance industry such as unattractive investment returns of some green projects, fundraising difficulties and high funding cost in some local regions and industries, and lack of financing instruments that fit with the funding pattern of medium to long term green projects.

Ma Jun, Chief Economist of PBoC, added that the market sees more frequent launches of innovative green products, financial institutions should keep the momentum going and drive the innovation in green financial products and services further, as well as to push forward the development of greens bonds, green securitization and green index-linked products.

Several other keynote speakers also talked about the significance of China and the international community working hand in hand to promote green finance.

Liu Dashan, Chair of China Energy Conservation and Environmental Protection Group (CECEP) told the audience that the collaboration with Climate Bonds Initiative and its internationally recognized Climate Bonds Standard would help China’s green bonds market go global and boost investors’ confidence.

Report focus on local and regional finance 

At the local government level Study of China’s Local Government Policy Instruments for Green Bonds (中国地方政府绿色债券 激励机制研究) reviews the progress of policy signals, supporting facilities, financial incentives and recognitions that have been offered to encourage the development of green finance at the local and regional level. 

The report also identifies the policy instruments at the disposal of local governments based on central government policy framework, and presents a few successful and replicable case studies and international experiences as reference for China’s future development in promoting green bonds. 

Six Core Recommendations

Six recommendations are made to support green bonds development and a local and regional level:

• Further action by central government ministries, commissions and exchanges actions to encourage local governments to support green bonds including additional local pilot programs;​​​

​

• Development of specific green bond agendas and explicit policy signals by local governments that have already begun explorative actions;

​

• Use of a wider range of policy measures at local government depending on resources and financial capabilities including financial incentives to bond issuer, policy signals, facilities recognition and awards;​​

​

• For the many provincial and municipal governments that have yet to incorporate green finance and green bonds into their agenda, more preliminary research and benchmarking is formulating action plans and promotion of green bonds in light of local conditions;

​

• Assistance from regulators, industry associations and academic institutions for local governments to gain more experience on the policy instruments at the disposal of local governments to promote green bonds;

​

​

• Enhanced communications from media and industry associations in recognition of “top green firms” and engagement with more local governments to introduce policy measures for the promotion of green bonds.​

​

The Last Word:

The growing attendance at the green finance summit is indication of the importance being placed on green investment policy at all levels of government in China. 

This report is a further contribution to those green finance policy discussions and development. 

Available in both English and Chinese, Study of China’s Local Government Policy Instruments for Green Bonds (中国地方政府绿色债券 激励机制研究) has been produced with the support of the Green Finance Committee and the UK Foreign and Commonwealth Office (FCO).

Climate Bonds thanks both organisations for their assistance. 

We will be increasing our China based development work and activities during 2017 in conjunction with our local partners.

Keep an eye out for future reports and events.

Till next time,

Climate Bonds

Disclosure: CECEP is part of a collaboration between the China Central Depository & Clearing Co. Ltd (CCDC) & the Climate Bonds Initiative to produce the The ChinaBond China Climate-Aligned Bond Index.

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

Green Bond Pioneer Awards media digest – check out what media around the globe said about the winners.

After a few months break, we come back to you with the media digest.

And the occasion seems just right: March saw our 2017 Annual Conference and Green Bond Awards, recognizing institutions, companies and governments for their leadership in green finance.

Here’s our pick of the stories:

Bloomberg, Green Really Is Gold for These Bond Lovers, Anna Hirtenstein

A title that captures the spirit of “the biggest industry event of the year”, where 600 attendees from 40 countries participated in discussions about the future of the green bonds market. 

Diversity of the issuance and “aggressive” growth predictions for 2017 are two main takeaways from the conference as picked up by the author. Apart from that, Anna Hirtenstein gives you a thorough breakdown of key trends that emerged at the conference.

“There’s about $100 trillion of institutional money in the world, and less than 1 percent is invested in anything green,” said Sheren, who is co-chair of the Group of 20’s Green Finance Study Group. “We have to make it palatable to institutional investors. Green bonds are the best instrument to do this.”

Reuters, From Africa to Asia, governments considering 'green' bond sales, John Geddie and Karin Strohecker

Authors of the Reuters article focus on the sovereign green bonds market with Poland and France at the forefront and Kenya and Nigeria queuing up to make a big entry.

"We have a huge pool of investors and you would hope that with time this would become a fashion. There is no other show in town, it has to be green," Njoroge said at the event hosted by London-based non-profit Climate Bonds Initiative (CBI).

International Financial Law Review, How to build a local green bond market, Lizzie Meager

Top-down support is central to building a local green bond market, according to speakers at an industry event in London this week.

NDCI.global,Green bonds – on a Paris trajectory?, Ian Callaghan

We have already recommended you this great read from Ian Callaghan, who masterfully identifies the most important trends from the stack of topics that emerged during the conferences and blends them with some unmissable quotes from key speakers. 

“That’s the win-win-win,” Kidney says. “The countries get the investment for the projects they need, the bond market gets its pipeline, Paris gets the more ambitious outcomes that are vital for the 1.5°C-2°C result. But all the actors aren’t on the stage yet, let alone having learnt their lines. We need to accelerate, we need to get the full cast assembled to get this show properly on the road.”

Medium, Green Bonds Need a Transformational Navigation Cockpit, Olaf Brugman

Dr Burgman, one of the conference panelists, starts his article with the ‘defining green’ argument and moves on to a question of ensuring, that green bonds deliver ‘more demonstrated positive environmental impacts’.

In other words, the navigation tools and management information is available, we just need to connect the dots and wire them differently to make green finance standards communities more effective and transformational tools.

Inside Financial & Risk, Green Bonds take centre stage despite Trump’s climate change agenda

Author talks about the conference, in the context of uncertainties posed by the new America’s president’s views on climate. He arguments that despite the new circumstances, the investors’ desire for green products does not waver.

The Covered Bond Report, ECBC conceives green label as collateral, economics scrutinized

At the conference, Jennifer Johnson of the European Covered Bond Council revealed body’s plans for introducing green covered bond label.

It is working on a Energy Efficient Mortgages (EEM) Initiative aimed at creating blueprint for loans incentivizing improvements in properties’ energy efficiency (…)

Bonds & Loans, CBK Governor on the Trump Effect, Banking Sector Risks, and the Promise of Green Finance

Interview with Central Bank of Kenya governor conducted at the conference, among others, covers the role, green bonds may play in Kenya’s public sector finance strategy.

We are coming at this from the perspective of financial stability, and the impact on the banking institutions themselves. We need to assess the risks and challenges these instruments present to the industry. We also believe that if green bonds or other sustainable finance instruments are managed correctly, they can have a profoundly positive affect on the country.

You can also read about the event in the Responsible Investor’s March’s green bond round-up.

LOCAL MEDIA COVERAGE

Local media extensively covered the awards granted to local institutions, companies and governments.

Read more about the winners from China, Poland, Mexico, Colombia and others in your own language.

CHINA

China’s issued $36 billion of green bonds in 2016 that makes up about a third of the market. Various Chinese institutions were recognized at the Green Bonds Pioneer Awards and country’s central bank received the Innovative Regulator Award.

People’s Bank of China – Innovative Regulator

Hainan Ribao, 中国央行荣获   绿色债券创新监管奖

JRJ.com,中国央行荣获绿色债券创新监管奖

Sina, 中国央行荣获绿色债券创新监管奖

Xinhua

Recognition Certificate: Shanghai Stock Exchange

Hexun, 上交所绿色债券市场取得明显进展

China Securities News, 上交所绿色债券市场取得明显进展

MEXICO

Mexico was recognized in two areas: Largest Non-Financial Corporate Green Bond awarded to Grupo Aeroportuaro Ciudad de Mexico and Regional Sub-Sovereign won by Mexico City (LatAm).

We have also granted a Recognition Certificate to country’s stock exchange. Lots of media attention!

El Economista, CDMX, premiada por emision de bono verde

Cities Today, Mexico City wins green bond award

“I wish to thank the Climate Bonds Initiative for its recognition of Mexico City for being the first city in Latin America to issue a green bond and for taking actions to tackle climate change in a decisive and innovative way as a local government.” said Miguel Ángel Mancera Espinosa, Mayor of Mexico City.

Mexico Embassy in the UK, Mayor of Mexico City Receives Award in London

Development Finance, Mexico City wins green bond award

Secretaria de Relaciones Exteriores, Mayor of Mexico City Recieves award in London

La Jornada, Grupo Aeroportuario Recibe premio por construccion de NAICM

Televisa.NEWS (video), Fomentan Los bonos verdes en la BMV

Noticias MVS, Recibe Mancera premio green bond awards 2017 para la CDMX

El Universal, NAICM recibe reconocimiento por emision de bonos verdes

Almomento, Macera recibe premio, ‘green bond awards’ en londres

Almomento, Macera recibe premio, ‘Green Bond Awards’ en Londres

Citiscope,Lessons from Mexico City’s green bond, the first municipal issuance in Latin America

Capital21, Jefe de gobierno de la CDMX recibe en Londres el Green Bond Awards 2017

El Plural Mx, Recibe Mancera premio Green Bond Awards 2017 para la CDMX

El Mundo de Poza Rica, Recibirá Mancera premio Green Bonds Awards 2017 en Londres

Debate MX, Mancera recibió premio Green Bonds Awards 2017 en Londres

Yo Campesino, Macera recibe premio, ‘Green Bond Awards’ en Londres

Publimetro, Otorgan a Mancera premio por lucha contra cambio climático

POLAND

Poland’s award in the First Sovereign Green Bond category was broadly reported by the local media. The bond’s significance is strengthened by the fact that it was issued by a coal-reliant economy. Deputy Finance Minister Piotr Nowak who received the award signaled Poland plans further sovereign green issuance in 2017.

Polish Radio English Section, Poland given award for green bonds issue

“This honour shows that the Polish government cares about balanced economic and social development and green project development,” Poland’s Deputy Finance Minister Piotr Nowak said.

Embassy of the Republic of Poland in London, Poland Receives Green Bond Pioneer Award

Polish Press Agency,Polska Nagrodzona w Londynie za Zielone Obligacje

Interia, Polska Nagrodzona W Londynie Za Zielone Obligacje  

Finanse, Polska Nagrodzona w Londynie za Zielone Obligacje

Obserwator Finansowy, Polska Nagrodonza w Londynie za Zielone Obligacje

mPolska24, Polska Nagrodonza w Londynie za Zielone Obligacje

Stooq, Polska Nagrodzona w Lonynie za Zielone Obligacje, MF planuje kolejna emisje w tym roku

Polskie Radio, Polska Pierwsza Wyemitowala Zielone Obligacje. Nagroda w Londynie

Niezalezna, Polski rzad nagrodzony. Zrobilismy to pierwsi na swiecie!

Poland-Ministry of Finance, Polska Nagrodzona za Nowatorska emisje obligacji prosrodowiskowych

CIRE, Polska Nagrodzona w Londynie za zielone obligacje

Wiadomosci Polska,Polska nagrodzona w Londynie za zielone obligacje

Biznes Polska,Polska nagrodzona w londynie za zielone obligacje, MF planuje koljna emisje w tym roku

Prasowki, Polska Nagrodzona w Londynie Za zielone Obligacje

wPolityce, Polski rzad nagrodzony w londynie! Wladze otrzymaly “Climate Bonds Award” za pierwsza na swiecie rzadowa emisje zielonych obligacji

eLondyn, Polska nagrodzona w londynie za zielone obligacje

NEW COUNTRY ISSUANCES

COSTA RICA

El Mundo, Banco Nacional recibe reconocimiento por liderar finanzas en favor del ambiente

COLOMBIA

El Economista, Bancolombia, primer banco privado de Latinoamérica en emitir bonos verdes

El Pilon, Corpocesar quiere convertir al Cesar en agente ambiental

MOROCCO

L’Economiste, Masen au «Green Bond Pioneer Awards»

La Tribune, Masen décorée aux « Green Bond Pioneer Awards »

Le Matin, Le Maroc représenté par Masen, primé à Londres

Energies Environnement, MASEN : Primé, à Londres, lors du Green Bond Pionner Awards

ORGANIZATIONS

Obvion, Obvion Wint Internationale Award Voor ‘Groene Funding’

MuniFin, MuniFin Receives Climate Bonds Initiative’s 2017 Green Bond Pioneer Award

CICERO, CICERO Awarded for Green Bond Work

Alpha Trains, Alpha Trains Honoured with the Green Bond Pioneer Award

Monash University, Prestigious global financial award for Monash University

Banco Nacional de Costa Rica, Somos el primer Banco en Centroamérica en recibir el premio Green Bond Award

Strasser Capital/MEP Werke, MEP Werke und Strasser Capital erhalten Auszeichnung von der Climate Bonds Initiative

London Stock Exchange, LSEG Receives Certificate of Recognition By Climate Bonds

AUSTRALIA

The Fifth State, Australia Recognised at Green Bond Pioneer Awards

The Last Word

Congratulations again to all recipients. We’ll be holding next year’s awards in conjunction with our 2018 Annual Conference in the first quarter of next year.

Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative publicly communication.

Latest announcement strengthens climate finance pathways & opportunities for investor engagement & green bond market growth 

What's it all about

International ratings & research agency Moody’s Investors Service (Moody’s) has announced they will be joining the Climate Bonds Initiative Partner Program.

Moody’s joins a diverse group of high profile organizations to partner with us to date in 2017 including investment managers Van Eck and M & G Investments, Dutch based NN Investment Partners and legal firm Norton Rose Fulbright. In addition, Deloitte France & Deloitte Luxembourg have joined the ranks of Approved Verifiers.  

Partners assist in developing initiatives to grow investment in climate finance solutions, green finance markets and participate in different market development and information activities.

Who’s saying what?

Henry Shilling, Senior Vice President with Moody’s Investors Service:

“Our partnership with the Climate Bonds Initiative allows us to boost their efforts to advance the development of international definitions and standards for green bonds, conduct research and educate issuers, investors, and other market practitioners.”

“Green bond issuance will likely set another record this year, yet this momentum could be accelerated with the benefit of improved and consistently applied environmental disclosures and reporting.”

Sean Kidney, CEO Climate Bonds Initiative:

“Moody's has been looking at environmental risks, including climate change risks, for some years now. For example, they’ve published a cross sector analysis of environmental risks for 86 sectors with almost $68 trillion of rated debt. This is vital work for investors.”

“This partnership is a substantial opportunity to deepen our relationship and to work together to support the fixed income market in grappling with the challenges we face in addressing climate risks.”

“We both believe that 2017 is going to be a huge year for the global green bonds market; we believe it will be the year green sovereign bonds take centre stage.” 

The Last Word

Momentum is everything and Moody’s coming on board has certainly given us a lift!

Their decision is another in a string of positivedevelopments from major market participantsduring early 2017.

Our 1^st quarter greenbond issuance figures will soon be available, giving a measure of how this year is shaping up against the same period in 2016.

We’ll also be looking at the various growth predictions for the year ahead. Market size and diversity is an indicator that we are always measuring.

Meanwhile, as 2017 evolves we look forward to working with Moody’s on future projects. Welcome!

'Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

Latest OECD report studies green bonds’ potential to finance the transition to a low-carbon economy. Examines policy measures to grow the market from billions to trillions over next decades.

What’s it all about?

On Wednesday the OECD (Organisation for Economic Co-operation and Development) released a new report: ‘Mobilising bond markets for a low-carbon transition’.

What does the report cover?                                                                                                                     

The report provides an excellent overview of:

-        Global green bond market developments to date

-        Barriers to growth

-        Policy tools that can be applied to scale the market further

-        Quantitative scenarios for green bond market growth from 2015 to 2035.

We recommend you take a look at the full thing, its only 100+ pages, but in case you’re short of time, we’ve extracted a few high-level takeaways.

The potential: US$ 4.7-5.6 trillion + of green bonds in 2035

The OECD estimates that the green bond market could ramp up to a whopping US$4.7-5.6 trillion in outstanding bonds by 2035, with annual issuance reaching a healthy US$620-720 billion.

These estimates are based on a two-degree scenario; the most central areas of low-carbon investments (energy, energy efficiency and low-emission vehicles), and the potential growth prospects of the four largest bond markets (China, the European Union the United States and Japan).

While green bonds originating from the first three nations are familiar to Blog readers, Japan is a relative newcomer with the Ministry of Environment only just releasing new Green Bond Guidelines.

The future global green bond potential is even larger when we add green bonds for climate adaptation, and the issuance from economies outside the big four bond markets; already we have seen issuance from a total of 39 countries from all corners of the globe.

How to move from billions to trillions: standardisation is crucial

An excellent snippet from the report: “Convergence towards commonly accepted definitions will be essential to maximise the effectiveness, efficiency and integrity of the market.”

Policy support: applying existing tools to green

In the words of Robert Youngman and Hideki Takada, OECD Environment Directorate, commenting on the report:

“A key challenge for policy makers is to understand how to make best use of available policy levers to help accelerate this shift towards low-carbon investment.”

This Blog Post from the report authors goes into more detail.

The Last Word

We hope to see this report stimulate further green bond action from governments around the world.

At G20 level in maintaining the momentum on green finance from the Hanzhou Summit  and the GFSG Synthesis Report.

In OECD member countries and beyond – as the report makes clear – policy support is crucial for green bonds to help meet global low-carbon investment needs.

You can be a part of further discussions on the topic in OECD’s upcoming webinar:

‘Green finance and investment: Using policy levers to accelerate green capital flows’

13:30 CEST on 28 April.

Registration details are here.

We’ll be listening in, we hope you can too.

'Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

Global law firm White & Case LLP is the latest international organisation to join Partners Program.

Global law firm White & Case LLP is the latest international organisation to join the Climate Bonds Initiative Partnership Program supporting the development of climate finance and green bond market growth.

White & Case join a diverse group of high profile organizations to partner with us to date in 2017 including Moody’s, investment managers Van Eck and M & G Investments, Dutch based NN Investment Partners and legal firm Norton Rose Fulbright. 

In addition, Deloitte France & Deloitte Luxembourg have joined the ranks of Approved Verifiers.  

Partners assist in developing initiatives to grow investment in climate finance solutions, participate in different market development committees & help define policy agendas for sector, country & sub-national green bond development programs.

Verifiers provide external reviews of green bonds. 

More on White & Case:

White & Case is a signatory to the UN Global Compact and supporter of the UN Sustainable Development Goals (SDG).

The firm has a global presence with staff  in 40 offices across 28 countries and and advises a broad range of clients in virtually every area of law that affects cross-border business.

Who’s saying what?

Cenzi Gargaro, Partner, White & Case (Paris):

“White & Case has been involved in various fields of Green Finance since its inception and has advised on numerous Green Financing transactions including landmark deals such as the recent first ever sovereign green bond by Poland and the first ‘green capital note’ for an innovative green securitization transaction.“

“There is now real momentum behind the concept of Green Finance and we are proud to be partnering with the Climate Bonds Initiative to drive this forward.”

Tallat Hussain, Counsel, White & Case (London):

“Green bonds are part of a wider trend toward social and environmental responsibility among companies, investors and financial institutions."

"With an international imperative for climate change adaptation finance and environmental protection, we are seeing strong encouragement by governments, public and other regulatory authorities and even NGOs looking ahead to innovative instruments and structures to make change happen.”

Karsten Woeckener, Partner, White & Case (Frankfurt):

‘Green Finance has been embraced with great enthusiasm over the past few years and the interest is not just from mainstream corporate and sovereign market participants but there is growing interest from a number of structured finance, emerging market and project bond participants.”

“The Climate Bonds Initiative on standardisation and transparency is working to ensure climate-related instruments remain attractive products for a broad range of market participants.”

The Last Word: from CEO Sean Kidney:

“White & Case bring a global perspective on climate and environmental developments in many jurisdictions and a broad-based legal capability to match.”

“As the Climate Bonds Initiative expands its international activities and in-country projects, having a law firm of this calibre as a partner provides invaluable expertise and capability.”

Welcome!  

Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment any individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds communication.

Stop Press! Moody’s joins our Partners Program

International ratings & research agency Moody’s Investors Service (Moody’s) announced they have joined the Climate Bonds Initiative Partner Program.

Henry Shilling, Senior Vice President with Moody’s Investors Service:

“Our partnership with Climate Bonds Initiative allows us to boost their efforts to advance the development of international definitions and standards for green bonds, conduct research and educate issuers, investors, and other market practitioners.”

Read the full announcement from Moody’s here.

Momentum since Mid-March

Green Bond issuance has remained steady since our last Market Blog in Mid-March.

Here’s our ‘at a glance’ summary of bonds issued since the last time we reported to you. You can also skip straight to news and gossip by clicking here.

Climate Bonds Certified Bonds

SNCF's second Certified Climate Bond - EUR 1bn (USD 1.1bn)

As with the previous issuance, proceeds will finance new and existing rail projects and upgrades. A small amount may also be directed towards the protection of biodiversity and natural resources.

A small percentage of the proceeds could be allocated to refinance existing projects.

Programmatic Certification in Practice 

SNCF Réseau is one of the first issuers to adopt our streamlined Programmatic Certification process for multiple issuers, this bond is part of that series.

The bond was verified by Oekom and certified against the Climate Bonds Low Carbon Transport Sector criteria. All investors came from Europe, with half from France and 70% were SRI investors.

In their investor presentation, SNCF mentions their aim to issue at least one green bond benchmark every year – great stuff!

Underwriters: BNP Paribas, Crédit Agricole CIB, Goldman Sachs, JP Morgan, NATIXIS.

Commonwealth Bank of Australia (CBA) Certified Climate Bond - AUD 650m (USD 496m)

CBA issued their first Certified Climate Bond making it a clean sweep with all four of the large Australian banks now having issued Certified Climate Bonds. Great news!!

Proceeds will go to 12 eligible Australian projects in wind energy (28%), energy efficient buildings (28%) and low-carbon transport projects (43%). See more in the investor presentation.

The Clean Energy Finance Corporation (CEFC) was a cornerstone investor, with a AUD 100m pledge in line with its wider commitment to support Australia’s green bond market and domestic clean energy development.

EY conducted the assurance process and will provide independent reviews until the bond matures in February 2022.

Underwriter: CBA.

P.S: Australia is becoming a best practice example for nascent green bond market development. We discussed this in a recent blog and you can also find some local media comment here. 

Investa two Certified Climate Bonds (!) - AUD 150m (USD 114m) and AUD 100m (USD 75m)

Australian REIT Investa Office Fund (IOF) have issued their first green bond and second green bond in just 3 weeks! The bonds were issued by two different entities within Investa, and certified under the Climate Bonds Low Carbon Buildings criteria.

For both bonds, proceeds will finance a portfolio of five low carbon buildings. Complying with the Climate Bonds Standard, the five buildings are in the top 15% of emissions intensity performance in their respective cities.

The first bond was for AUD 150m. A verification report was provided by EY. Demand was strong with the order book reaching AUD 350m. The transaction was capped at AUD 150m and price guidance revised 7 bps tighter due to strong demand.

Over 50% of demand was from green investors. 81% of demand came from domestic investors in Australia. Underwriter: ANZ

The second bond was for AUD 100m and was issued by the Investa Commercial Property Fund (ICPF) an arm of the Australian property group. There were two cornerstone investors on the deal - Australian Ethical Super and again, Clean Energy Finance Corporation (CEFC). Underwriters: ANZ, CBA.

Investa has made a Zero Carbon by 2040 commitment across their entire property portfolio.

With the 2016 release of emissions performance trajectories for major Australian cities, the way is now open for other commercial property companies to issue certified green property bonds.

Singapore’s First Certified Green Bond! City Developments Ltd Properties (CDLP) - SGD 100m (USD 71.4m)

CDL Properties (CDLP), wholly-owned subsidiary of CDL, issued Singapore’s first green bond as well as the first Certified Climate Bond by a Singaporean entity. It was certified under the Low Carbon Buildings criteria.

The 2-year senior secured green bond was issued under the CDLP’s SGD 700 million secured Medium Term Note programme first established in 2001.

KPMG provided the verification report while Sustainalytics undertook the review of the issuer’s Green Bond Framework.

Proceeds will be allocated towards the repayment of SGD 100m loan extended by CDL to its subsidiary, which financed 12 retrofit and upgrading projects for the iconic Republic Plaza building achieving energy and water savings. For future issuances, proceeds will be funding projects for new retrofits of Republic Plaza. 

Republic Plaza is one of Singapore’s tallest towers. In 2012, the 66-storey building was awarded the highest Green Mark Platinum rating by the Building and Construction Authority (BCA).  

Underwriter: DBS Bank

P.S: Singapore is one of the cities where Climate Bonds has established emissions performance baselines for commercial property.

Using data supplied by Singapore’s BCA the Climate Bonds Standard established the emissions performance figure for the top 15% of commercial offices buildings in Singapore which sits at 26.4kgCO2/sqm. This figure forms the baseline for assessing property bonds against the Climate Bonds Low Carbon Buildings Standard. 15% of commercial office buildings comply initially, with the hurdle rate getting a little tougher every year towards the objective of achieving zero carbon emissions by 2050.

Queensland Treasury Corporation (QTC) - AUD 750m (USD 576m)

Yup… another certified issuance from Australia!! QTC issued their debut green Certified Climate Bond (7 years, 3%), the largest green bond issued in Australia to date!

Proceeds will be directed to transport and energy projects with the four nominated projects all falling under low carbon transport and renewable energy:

• Gold Coast Light Rail Stages 1 and 2
• Moreton Bay Rail Link – Redcliffe Peninsula Line
• New Generation Rolling Stock
• Sunshine Coast Solar Farm development

Strong demand saw the initial offering on AUD 500m upsized to AUD 750m. 77% of the investors were asset managers, 13% insurers/pension funds, and the rest split. 76% of the bond holders are from Australasia, 11% from Asia, 9% from EMEA and the rest from the Americas.

DNV GL provided the third-party assessment on the certification. QTC will provide annual updates on the projects status, funding allocation as well as impact reporting.

Underwriters: ANZ, Merrill Lynch International Australia, NAB.

New York MTA, Certified Climate Bond – USD 325.6m

Hooray – another one from New York MTA! The latest Certified Climate Bond bring total issuance from NY MTA now amounts to over USD 2bn.

Verification document from Sustainalytics.

Proceeds are used to finance capital investment in MTA’s electrified rail assets and supporting infrastructure. 

MTA is another large issuer who has taken up the new Programmatic Certification process, streamlining the certification against the Climate Bonds Standard.

More info: prospectus; certification documents, analysis on previous bonds here and here, Climate Bonds Low Carbon Transport criteria.

Underwriter: Jefferies.

NY State Housing Finance Agency, certified climate bond – USD 56.3m

New York HFA’s came to market for a 3^rd time this week with its latest Certified Climate Bond. As with previous bonds, it will finance new construction of energy efficient buildings in line with the Climate Bonds Standard.

NY HFA is another issuer who has adopted Programmatic Certification option available in Climate Bonds Standard V2.1 as their preferred method for issuing certified green bonds.

More info: prospectus, verification report from Sustainalytics, previous bonds here, Climate Bonds Low Carbon Buildings criteria

Underwriter: JP Morgan.

Corporate Green Bonds

Engie close second benchmark green bond: EUR 1.5bn (USD 1.6bn)

Following on from their debut green bond issuance in May 2014, French based energy utility Engie closed their second green offering in two tranches: 7-year EUR 700m and 11-year EUR 800m.

Proceeds will be used to finance and refinance Eligible Green Projects included in three categories:

1) Renewable energy: hydro, geothermal, wind, solar, biogas, biomass and any other renewable sources of energy. Two criteria have been added to their previous green bond framework:

• Biomass projects may be included, subject to local production and lack of conflicting utilization of the resources;
• Hydroelectricity production must comply with a recognized international standard for Green Bonds such as the Climate Bonds Initiative, UNFCCC Clean Development Mechanism (CDM) or the IFC Reference Standards for hydro projects or equivalent.

2) Energy efficiency including heating and cooling network, cogeneration, optimization of buildings or plant efficiency, systems for energy management such as smart grids, smart metering, and more generally energy and facility management solutions.

3) Natural resources preservation including water and/or waste management.

Engie (previously GDF Suez) faced some criticism after their first bond was issued, because of the initial inclusion of the 3,750MW Jirau Dam in Brazil. For this bond, Engie has taking steps to assure investors that such large hydro projects will not be included in this bond unless they comply with criteria from UNFCCC, IFC or [potentially] the Climate Bonds Standard.

There are no projects from Engie that have yet been identified. Secondly the Climate Bonds criteria on hydro is still in the process of being developed. So we don't have a clear view yet on which types of projects from Engie will be funded by the bond, nor is our criteria finalised.  For now, the adoption of UNFCCC and IFC guidelines is sufficient to give investors some level of comfort. 

For biomass projects, the criteria given above will certainly be useful but, given the potentially controversial nature of biomass projects, it would be useful if the hurdle they defined was more in line with an international standard or certification scheme.

Vigeo Eiris provided the second party opinion on Engie’s Green Bond Framework.

The company has mandated an external auditor to control the allocation of the bond’s proceeds.

Underwriters: BBVA, BNP Paribas, CITI, Credit Agricole CIB, Credit Mutuel, HSBC, ING, KBC, MIZUHO, NATIXIS, SMBC NSA, SG and Standard Chartered.

Entra’s second green bond – NOK 750m (USD 89m)

Norwegian real estate company Entra issued their second green bond, a 7-year, floating rate of NOK 750m after their green debut of NOK 1bn in September 2016. CICERO provided the second party opinion.

Proceeds from the issuance will finance new construction or major renovation of commercial and residential properties with a minimum BREEAM certification of "excellent.”

Well, that is indeed Excellent! Well, we have only one word to say here: “Utmerket!”

Underwriters: DNB, SEB, Swedbank.

TenneT's world first! green hybrid bond – EUR 1bn (USD 1.1bn)

This is TenneT’s fifth green bond, making a total of approximately USD 4.5bn of green debt raised by the Dutch firm since June 2015. After a Green Schuldschein issued in May 2016, the issuer keeps diversifying its green financing. We love seeing green bond market innovation!

This fifth green benchmark issuance is special its the first hybrid green, as the security is perpetual and has both fixed and floating coupon rates, providing a number of advantages for the issuer and investors.

As with previous green bonds, proceeds will finance projects relating to the transmission from offshore wind power plants into the onshore grid.

A second opinion was provided by Oekom. TenneT commits to a regular reporting on the bond.

Underwriters: Barclays, BNP Paribas, Deutsche Bank, HSBC, ING.

Atrium Ljungberg’s inaugural green bond – SEK 1.3bn (USD 148m)

Swedish real estate property manager Atrium Ljungberg has issued their debut green bond in late March. Composed of 2 tranches, this 5-year bond is part of the Nasdaq Stockholm Sustainable Bonds List.

20 out of the total 26 investors of the bonds were new, accounting for around three quarters of the issued volume. Among the new investors are Storebrand SPP, SEB IM, Första AP-fonden and UK-based dedicated green and impact bond manager Affirmative Investment Management (AIM).

Second opinion on Atrium Ljungberg’s Green Bond Framework was conducted by CICERO.

Eligible categories:

• New and existing commercial and residential properties with a minimum of BREEAM very good or Miljöbyggnad Silver
• Major renovation of residential and commercial properties with energy savings of at least 35%
• Energy efficiency projects with at least a 35% reduction of energy use
• Renewable energy (solar, geothermal and wind power) and
• Clean transportation infrastructure for electric cars.

We welcome this new issuer to the green bond market and particulary its approach to green buildings - a reduction target of 35% in building energy use over a 5 year bond is in line with the Climate Bonds Low Carbon Buildings criteria.

Other areas such as renewable energy and electric cars are all in line with our Taxonomy. Great ambition and leadership shown from Nordic issuers once again!

Underwriter: SEB.

QBE Insurance Group (QBE) –  USD 300m

Now here is an interesting one. QBE Insurance is just about to issue Australia’s first bond from the insurance sector.

Proceeds will be allocated towards financing or refinancing the group’s green bond portfolio. Green bonds are eligible by either being certified by Climate Bonds or Green Bond Principles OR the green bond finances activities that meet a set of eligibility criteria.

It’s slightly confusing – a green bond to buy green bonds. It has left a few of us with the question – is this a good thing?

Our initial view was, well, not really – it is increasing the volume of the green bond market but not the amount of money that is going to actual green projects – so the market grows but projects stay the same. Technically, this could go on forever – green bonds to buy green bonds that buy green bonds? Basically, double counting.

However...  increasing the overall size of the green bond market has some advantages – especially in increasing the overall flow of money into the market and creating liquidity. In this way, we are looking at the bond more like we might analyse a passive product like an ETF – i.e. useful market infrastructure.

Further, reporting is very transparent, primarily through the opinion from Sustainalytics. There is also a useful set of exclusion criteria as well as eligibility criteria outlined.

Another question we asked ourselves is, what else can insurance companies do in this market given the assets that they hold?

QBE holds approximately 69% of its investments in corporate and government bonds, 3.4% in cash and 15% in short term money – basically not great assets for issuing green bonds. This leaves only a small proportion of investments to assets which could be linked to low carbon investment such as property trusts (4.1%) and infrastructure debt (1.8%). So, as bonds are the majority of their asset base, it's the obvious place to start in the green bond market.

Overall… the bond will be included in our list of bonds that meet our Taxonomy as its framework in in line with the GBP and our broad taxonomy. However, we will not be including it on our overall market figures due to the problems of double counting.

Underwriters:Credit Agricol CIB, HSBC, Lloyds, Morgan Stanley.

Paprec’s second green bond – EUR 225m (USD 243m) 

This is the second self-labelled green bond from the French based Paprec Group, a major materials recycler.

According to the second opinion provided by Vigeo EIRIS, the net proceeds of the bond will be used to “finance in whole a Recycling Project, consisting in the acquisition of Coved, a French company specialized in waste collection and recycling activities”.

This is a difficult one – the bond will be used to purchase a subsidiary which operates within the recycling sector. So far so good. But under closer inspection, Coved’s activities also include (listed on Coved’s website) the rental of tippers and mobile toilets, the unblocking of pipes, and archives management activities which are not an easy fit within our Taxonomy.

What we’re uncertain of at the moment is how much of the business is linked to recycling vs other areas. We’re going to do a bit more research and get back to you for the next blog…

Underwriters: Credit Agricole CIB, Credit Suisse.

Chile’s first ever green bond from Inversiones CMPC – USD 500m

Empresas CMPC subsidiary, Inversiones, issued its first green bond of USD 500m, first ever from the Chilean market! The Chilean forestry, pulp and paper company received a second opinion on its Green Bond Framework from Sustainalytics.

The 10-year bond will fund projects in the following five eligible categories:

1. Sustainable forestry: sustainable forest management for plantations certified by FSC, CERTFOR (PEFC) or equivalent, including the development of hybrids without genetic manipulation to contribute to water consumption reduction and increased CO2 capture
2. Biodiversity preservation and restoration of High Conservation Value Forests (HCVF): conservation of forests, protection of endangered flora and fauna
3. Sustainable water management: reduction of consumption in industry, reuse as well as systems improving the quality of treated water; reduction of organic content and volume of effluent
4. Pollution prevention and control: liquid and solid waste prevention and control projects; gas capture and incineration in production facilities
5. Energy efficiency: for instance, projects replacing pulpwood truck transportation with more energy efficient barges.

Forestry is a difficult area when it comes to defining ‘green’ so certifications systems such as FSC are a useful proxy and one we would expect all issuers of green bonds to be in line with, which Inversiones is, so good practice from them.

For the other categories, hurdles are not as easy to establish but we recognise the broadly positive impact that each of these may have, particularly the preservation of biodiversity and reduction of waste production and water use.

Within energy efficiency, the replacement of trucks with barges, sounds, logically, to be less emissions-intensive. There is insufficient information available to properly assess this (not being a comparison we often have to make!) but we’ll give them the benefit of the doubt!

For next time… to really promote best practice, the issuer should consider adding hurdle rates for the other projects too – e.g. % water reduction targeted etc. Further, additional information about barges vs trucks etc. could be provided to give investors additional assurance about technologies that they aren’t used to assessing.

The issuer has committed to publish annual updates assessed by an external auditor, which we will read with anticipation, to note the ambition level of financed projects.

Underwriters: BAML, JP Morgan, Santander.

Lyse AS’s inaugural green bond – NOK 500m (USD 59m)

This Norwegian power company owned by 16 municipalities has just issued a 5-yeargreen bond. The transaction was close to 3x oversubscribed. 

The firm’s Green Bond Framework received a second opinion from CICERO. The framework lists the following eligible projects: renewable energy category, including hydro, solar, wind and related infrastructure activities.

Lyse will not finance nuclear or fossil fuel projects through its Green Bonds. The ambition is to use the majority of the green bond proceeds to finance new projects.

Selection of projects will be done via the Treasury Department and the relevant production unit at Lyse and will need to be approved in consensus.

Regular readers of this blog will know that hydro is a bit of a tricky matter from a climate perspective as flooding reservoirs causes huge methane releases. As such, we would appreciate further disclosure of any additional hurdles or criteria that hydro projects must meet in order to be included.

From the Norwegian press release, it seems that this specific issuance will primarily finance the construction of a new hydroelectric power plant in Lysebotn to replace the current power plant operational since 1953. The new power plant uses existing reservoirs and dams but will provide 15% more electricity and will be completed in 2018. The project has also previously benefitted from the proceeds raised by NIB’s environmental bond issued in May 2015.

Given that the aim of the project is to increase electricity production of an existing facility without increasing flooding new reservoirs, the primary climate concern (new reservoirs) is low and our view is that the project will have broadly positive climate outcomes. Great stuff!

Underwriter: SEB.

Commercial Banks 

A first from the Gulf region! National Bank of Abu Dhabi inaugural green bond – USD 587m

This green debut bond from the National Bank of Abu Dhabi (NBAD) has a 5-year maturity and pays an annual 3%.

Vigeo EIRIS provided an opinion on the issuer’s Green Bond Framework which lists the following eligible categories:

• renewable energy
• energy efficiency and low carbon buildings
• pollution prevention and control
• sustainable management of living natural resources
• terrestrial and aquatic biodiversity conservation
• clean transportation
• sustainable water management
• adaptation
• decarbonizing technologies.

Eligible Projects may include existing, on-going or future projects located worldwide, especially within the Middle East region. Proceeds can finance projects or corporate loans to pure players where pure players are defined as legal entities with 90% or more of activities within eligible categories.

NBAD aims to have the full deployment of the Green Bond proceeds within 12 months of the issuance and will deliver an annual Green Bond Report until the bond’s maturity.

Three projects have already been selected by NBAD:

• a solar concentration heat plant of 100MW of installed capacity, located in the UAE
• energy efficient buildings with LEED Silver certification, located in the USA
• a heavy rail network project located in UAE.

While the eligible project category list is fairly broad, the project list as defined above does not contain anything unusual. Energy efficient buildings are also an essential part of low carbon infrastructure but we note that LEED Silver buildings wouldn’t necessarily qualify under the Climate Bonds Standard which requires buildings to be certified to LEED Gold or meet other criteria. Rail and solar thermal projects are very much part of a low carbon economy and we hope to see more of these projects.

Well done to NBAD – a new participant from a new region of the green bond market, we hope to see more!  

Underwriters: BAML, CITI, Credit Agricole CIB, HSBC, MUFG, NBAD.

Harbin Bank’s debut green bond - RMB 2bn (USD 289m)

Harbin Bank is headquartered in China’s northeast Harbin city, part of Heilongjiang province.

Proceeds will finance or refinance projects under PBoC’s Catalogue, including Energy Saving, Clean Transportation, Clean Energy, Pollution Prevention, Ecological Protection and Adaptation, and Resources Conservation and Recycling.

Issued on China interbank market, this bond was 2.6 x oversubscribed.

EY provided a second opinion.

At this stage, there is very limited information to make an assessment of this bond. While most projects that are in line with the PBoC catalogue would also qualify under the GBP or Climate Bond Standard, there are a few, such as fossil fuel efficiency upgrades or clean coal that would not.

Accordingly, we will continue to keep this bond under review for evidence of any such projects in quarterly reporting.

Underwriters: Haitong Securities, Bank of China International, Hengtai Changcai, and Bank of Communications.

Bank of Beijing’s first green bond - RMB 15bn (USD 2.2bn)

The issuance is a typical green financial bond that proceeds will be used to finance/refinance projects outlined by PBoC’s green bond projects catalogue. Bank of Beijing provides three examples of eligible projects including:

• efficiency upgrading and reconstruction of a sewage plant
• construction of a municipal solid waste incineration power plant and
• construction of a wind farm.

EY provided a second opinion.

From the examples given thus far, wind farms are an easy one – definitely green. For waste, our criteria are not yet complete but it is likely that incineration for energy will be included – possibly subject to additional criteria not yet defined. For efficiency upgrades of sewage plants, investors would need more information to make a proper assessment as to the environmental benefit of this project but, in general efficiency, upgrades are positive.

Underwriter: CITIC Securities, Industrial and Commercial Bank of China, China Securities, Agricultural Bank of China, Morgan Stanley, Huaxin Securities.

 Dutch Nederlandse Waterschapsbank N.V.’s new green bond out – SEK 1.25bn (USD 138m) 

This is NWB Bank’s fifth green bond (the second issued in 2017), making a total of USD 3.5bn green bonds issued by the bank since 2014!!

As per previous bonds, the proceeds will be allowed to pre-finance or re-finance water management through mitigation, adaptation and biodiversity projects inside following areas:

• Energy reduction and biogas production
• Reuse of nutrients and other substances
• Transport and treatment of wastewater
• Flood protection infrastructure
• Irrigation and drainage, pumping stations
• (Re)design of watercourses and wetlands for water storage and discharge
• Sanitation and dredging and waterbeds
• Improving water quality.

An external audit and reporting will be provided annually.

CICERO was the second opinion provider.

Underwriters: DNB, SEB.

Municipal Green Bonds

Vermont Municipal Bond Bank, first green bond – USD 6.1m

It may be small but it’s the first green bond from Vermont Municipal Bank (VMB). Vermont Municipal Bond Bank operates in a similar manner to Nordic municipality aggregators like MuniFin and Kommuninvest - it assists Vermont’s municipalities (school districts etc.) to gain access to long-term bond financing at low borrowing costs.

Proceeds will go to:

1. Energy efficient equipment (76%) in a school district. Equipment includes: boilers, heating control systems energy recovery ventilators, windows, insulation, and LED lighting. It also plans to install solar power.
2. A new energy efficient building (24%) for the policy and fire department that meets the 2015 Vermont Commercial Building Energy Standards. The town has determined that the building has a design target of net zero emissions.

How does this rank in terms of ‘greenness’? Energy efficient equipment falls into the Industrial Energy efficiency stream of the Climate Bonds Standard which is not yet complete so it is hard to say but LED lighting is likely to be included as definitely green when the criteria are developed. Other equipment such as boilers may have to meet certain efficiency hurdles or star ratings to be included.

It is not clear what hurdles/criteria VMB are using to define energy efficiency of the products/technologies which makes assessing the ‘greenness’ of this part of the bond tricky. However, we do note that an initial audit indicates that the equipment will save $105,000 per year in energy savings which is about 2% of the value of the total investment.

Net zero design for the energy efficient building shows great ambition going beyond regulatory requirements! While there is no one definition of what ‘net zero’ means or how it compares to known standards such as LEED and BREEAM, there is some additional information on the technologies that will be included in this design here.

More info: prospectus.

Underwriter: Morgan Stanley.

City of Saint Paul, Minnesota – USD 8m

Another green bond from St Paul, bringing total issuance from this Minnesota city to USD 24m.

As with previous bonds, proceeds are directed to clean water and sustainable water management through improving the City’s Sewer System.

More info: prospectus, analysis on previous bonds.

Underwriter: Piper Jaffray.

Massachusetts Clean Water Trust – USD 207.4m

As with previous bonds, proceeds will finance water and waste water treatment plant upgrades, restoration of an aqueduct and construction of a wind turbine to power a water pollution facility

More info: prospectus, past bond analysis.

Underwriter: BAML.

Rhode Island Infrastructure Bank – USD 28.1m

This is the 3rd bond from the Infrastructure Bank and proceeds will finance three projects, all of which relate to sewage upgrades and improvements. The largest of these is the City of Newport which includes both upgrades to the wastewater pollution control facility as well as the installation of solar panels at the facility.

The two other projects are a combination of sewage upgrades, flood protection and treatment facilities.

Sewage falls under the Water criteria of the Climate Bonds Standard which covers built infrastructure assets such as these. One of the important requirements of the standard is that water infrastructure improvements have sufficient climate adaptation and resilience planning in place.

The reporting on this bond does not indicate that there is planning in place specifically on adaptation. However, we note that numerous capital investment plans are detailed in the prospectus all with the overarching goal of reducing sewage overflows and water pollution which are positive outcomes.

The Bank has committed to annual reporting on allocation and the prospectus includes information on how the bond proceeds will be tracked and allocated.

More info: prospectus; analysis on previous bonds.

Underwriter: Morgan Stanley.

California Infrastructure and Economic Development Bank – USD 450m

This is the 3^rd green bond from the California Infrastructure & Economic Development Bank (IBank). Proceeds will go to 34 separate water-related projects all listed in the prospectus. Projects are eligible if they adhere to the standards of the Federal and State Clean Water Acts.

Compliance with clean water legislation alone is not sufficient to guarantee ‘greenness’ but the projects have generally positive environmental impacts by reducing water pollution and reducing impact on local ecosystems.

As with all water projects, the difficult aspect in assessing them is understanding whether they are as ambitious as they could be – the logic being that if there is investment happening now, that it is both ‘future-proofed’ for possible climatic changes and population growth and, uses best available technology to ensure that the investment has a high impact. 

There are too many projects to assess this and of course, it's very complex!

We do applaud IBank's continuing efforts to provide finance for these types of projects across California.

Underwriter: Morgan Stanley.

Commonwealth of Massachusetts – USD 100m

This is the third green bond from Massachusetts. As with previous bonds, proceeds will finance clean water, energy efficiency, open space and river revitalisation projects.

See analysis on previous bonds here.

More info: 2014 green bond reporting and prospectus.

Underwriter: CITI.

Muni Gossip Alert… Cape Town is planning to launch its first green bond (and potentially Certified Climate bond), a ZAR1bn (USD 79.2 million) issue, on the Johannesburg Stock Exchange in July. Much of the capital will be used for water demand management. The city is currently experiencing a severe drought.

Development Banks

Nordic Investment Bank’s 13^th green bond is out – BRL 5.5m (USD 1.8m)

This is the 11^th bond from NIB, its second in BRL. Proceeds of previous bonds have been directed to renewable energy, wastewater treatment, public transport, green buildings, energy efficiency and waste management. Financed projects in 2017 included 3 projects in Sweden in wastewater treatment, energy efficiency, and renewable energy.

More information: green bond framework, CICERO opinion, projects financed here.

Underwriters: Credit Agricole CIB, SBI.

World Bank’s new green bond – USD 350m

This bond is the first WB’s green issuance for 2017. The total green bonds raised by the WB now amounts to over USD 10bn, with more than 130 bonds issued!

As per previous bonds, eligible categories were reviewed by CICERO.

We are very happy about reaching this new milestone for the green bond market!

Underwriter: SEB.

Green ABS

Hannon Armstrong’s third green ABS - USD 84m

Hannon Armstrong have completed the issuance of their third “Sustainable Yield Bonds”.

It has received the highest Green Bond Assessment grade of GB1 by Moody’s, has a foxed 4.35% coupon and matures in 2037.

The capital raised will finance efficiency upgrades and solar projects in “over 90 public schools and over 20 government properties across 4 US states”.

Bonds that do not meet international definitions of green

Nantong Economic and Technological Development Zone Co. RMB 300m (USD 43m) Green PPN

100% owned by the municipal government of Nantong city in the province of Jiangsu, the company develops and constructs projects in the city’s Economic and Technological Development zone.

There is no detailed information available on the use of proceeds due to it being a private placement so it will not be included in our data.

A principal-protected note (PPN) typically contains two parts, one part is the investment guarantees a minimum return equal to the investor's initial investment (the principal amount), while the other is the investment offers the potential, but doesn’t guarantee profits.

Underwriter: Industrial Bank.

Green Bonds Gossip and News Bites

On the Green Horizon:

• Just out... Comunidad de Madrid has issued a Sustainability Bond - the first green bond to list on the Borsa Italiana (more in next blog).
• Polish Tauron power may issue green bonds.
• More green bonds for Mexico City and Mexico airport.
• Mexican Agricultural Trust Funds (FIRA) to issue green bonds.
• IFC considers green Kangaroo bond.
• ADB to bring green bonds to Uridashi market.
• Eurofima announces it is keen to issue a green bond.
• Bank of Jinzhou is planning to issue RMB 2bn green bond in China’s interbank market.
• Seychelles to issue blue bonds worth $15 million to benefit fisheries industry.
• City of Gothenburg will be issuing its fifth green bond in June.
• Kaiser Foundation Hospitals in California are on track to issue their inaugural green bond. Second review from Sustainalytics. 

Sovereign and Policy News:

• Japan’s Ministry of Environment issues first green bond guidelines.
• Singapore Monetary Authority (MAS) to offset cost of issuing green bonds with new grant scheme.
• Two Colombian banks are planning green bond issuances later this year, following the country’s first green bond by Bancolombia in December. The country’s first Sustainable Banking Congress was held in Bogota a few weeks ago.

       (P.S: As we were writing this post, Davivienda bank issued a COP 433bn (USD 150m) green bond. We will go into further detail on our next blog).

Reading & Reports: 

• The OECD has just released Mobilising Markets for a Low Carbon Transition, 100+ pages on green bond markets. A blog post with some more details is here.
• Novethic and ADEME's new collaborative study about the European green funds market is available here with a focus on Germany, France, the Netherlands and Sweden.
• Green Securitisation: unlocking finance for small scale projects: A 2-page policy brief prepared for Climate Bonds Annual Conference. Download here.
• Growing the green securitisation market in Europe. This is a report we released earlier in the year with the Centre for Climate Change Economics and Policy at the LSE. Summary here.
• The changing role of Sovereign Wealth Funds and green finance. This World Bank blog post picks up on the theme.

​

​Moving Pictures:

• ABN AMRO have just released a lovely new green bonds video. Dutch with English sub-titles. 1m.24secs duration. Have a look.
• The California State Treasurers Office took the opportunity of Earth Day  to give green bond investment a push in this video, part of their ongoing efforts around climate finance. Great artwork, 3m58secs.

Green Bond Funds and Investors:

• Specialised green bond manager Affirmative Investment Management (AIM) have launched the LO Fund-Global Climate Bond Fund in partnership with Lombard Odier.
• LuxSE and SZSE have partnered to display three new Green indices that reflect the value of green bonds issued in China.
• BlackRock launches green bond Ucits fund. The fund will reflect the performance of the Bloomberg Barclays MSCI Global Green Bond Index.
• Canadian Solar Raises JPY 5.4bn with Inaugural Dual-Tenor Green Project Bond in Japan.
• IFC and Amundi to set up USD 2bn emerging markets-focused green bond fund.
• Mexico's CCFC is preparing it's green bonds guidelines.

Sovereign Wealth Funds and Green Finance

• Jean-Marc Mercier (HSBC): «Les obligations vertes peuvent changer la culture d’entreprise».
• Philips agrees €1bn loan with interest rate linked to sustainability performance.

That's all for the moment! 

We hope you've enjoyed this post, its length is in part a reflection of a growing market.

Till next time, 

The Markets Team

Disclosure: A number of the organisations identified in this communication are members of the Climate Bonds Partner Programme. A list of Partner organisations can be found here. 

Disclaimer: Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

China issues special green bonds guidelines for listed companies + new China Local Govt green bond policy recommendations

Green finance development continues at corporate and provincial levels

China’s green bond market has begun to heat up since last year, alongside with several supportive policy signals and guidelines by the Chinese government.

The latest move is by the China Securities Regulatory Commission (CSRC), which recently released a new set of Guidelines on the issuance of green bonds by stock exchange listed companies. This is a further expansion of the regulatory framework of the world’s largest green bond market. 

Bond Market Regulation

In China, bond market activities are under segregated supervision of regulatory authorities, categorised by issuer types.  The CSRC is the regulator overseeing issuance of bonds from listed corporates and corporate asset-backed securities. 

In December 2015, the People’s Bank of China (PBoC), China’s central bank, and the National Development and Reform Commission (NDRC), the country’s national policy management agency, published their respective guidelines for green bond issuance in China. 

The two sets of guidelines are complementary, as the regulators cover different areas of the bond market: PBoC’s guidelines cover green financial bonds within the inter-bank market (90% of China’s bond market), while NDRC’s guidelines regulate green enterprise bonds.

Both guidelines clarify what projects are considered green, albeit with some differences. (A government statement last year announced that the slightly different regulations would be “harmonised” this year; that will be under the supervision of PBoC).

The CSRC has adopted the green definitions used by PBoC; but they have added the restrictive proviso that “green bond issuers shall not be those who are high polluters or are in industries that conflict with the national industrial planning policy." 

That’s a kind of ESG filter over the eligible universe. This is the first time a regulator has done this.

CSRC has a very interested pro-active measure: it specifies that green bonds should be the priority when building connections with overseas stock exchanges.  That is useful fillip – expect stock exchange announcements in this area.

Provincial Developments

While regulatory authorities at the central government level have led the way in spurring the development of green bonds in China at the initial stage, some provincial and municipal governments are stepping up efforts to develop green finance, not only to follow political imperatives of the central government, but also out of genuine fundraising needs for infrastructure projects currently in the pipeline.

In early April, Beijing revealed its draft plan for a greener capital in the coming decade.  It plans to extend the city’s subway lines to 1,000 kilometres by 2020, almost double the current length of 574 kilometres.

You have to admit, that is incredible! That is what we want from ambitious low-carbon transport planning!

They also aim to achieve minimum of 12.6 percent of commuter journey being on on bicycles by 2030. Yes!

And Beijing is just one of the many cities in China that are embracing such a green transition. 

New Local Government and Green Finance Report

On 15 April we released a Study of China’s Local Government Policy Instruments for Green Bonds (中国地方政府绿色债券 激励机制研究) at the Annual Conference of the Green Finance Committee, China Society for Finance & Banking. 

The report found that all regions in China, except for the northeast, have issued green bonds in 2016.  Most of green bond issuers were headquartered in 14 cities, with Shanghai, Fujian and Beijing ranking as top three for amount issued.

The report was prepared with our China collaborator, SynTao Green Finance, with support from the Green Finance Committee of the China Society for Finance & Banking and from the UK Foreign and Commonwealth Office (FCO).

The report is the most detailed analysis of regional and city based green bond policy and issuance in China produced to date.

Green bond markets face challenges at a regional level, such as lack of specific policy support for green bonds and low awareness of green bond issuance opportunities; but we expect that them to be more readily supported by local governments in future.

With the aim stimulating policy developments that support green bond growth in this in this next level of the market, yhe Policy Paper identifies a number a number of policy steps local governments can take.

Available in Chinese & English 

Read the full paper “Study of China’s Local Government Policy Instruments for Green Bonds” (中国地方政府绿色债券 激励机制研究) in Chinese and English.

'Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

Climate Bonds will be all around; Europe, Africa, Asia and South America... Come meet us if you're close!

Our CEO Sean Kidney will be speaking on green bonds at different summits, forums, conferences and roundtables around the world, including the India Green Bonds Council in Mumbai and the Brazilian Trade and Investment Promotion Agency's (Apex-Brasil) Investment Forum in São Paulo.

Justine Leigh-Bell, our Director of Market Development, will also be at the Apex Forum in São Paulo, and in the United States' east coast this month, where you can catch her speaking on green bonds for energy efficiency at the EE Global Forum and sustainable housing at the NYSAFAH Conference.

Anna Creed, our Head of Standards, will be in the capital of Ethiopia presenting on Climate Bonds. 

And Serena Vento, our Senior Relationship Manager, will be joining Sean at the Green Finance Summit 2017, in London. If you'd like to find out more about green bonds, our work and our Partners Program, come say hello!

May 2017 Events

Till next month,

Climate Bonds Initiative

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.

In this edition of the Standard & Certification Newsletter we look at: 

• Record certification figures for Q1 2017 with bonds from the EU, US, India, Mauritius & Australia. 
• The 3 big issuers who have shifted to Programmatic Certification 
• Can the Australian example be a guide for emerging markets?
• Standards development - a round-up of all our Technical Working Group activIties

Download your copy here.

We hope you enjoy it, 

Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

You’re invited to join representatives from US AID PACE-D, the Indian Green Bonds Council, Issuers and Investors at this 2017 Delhi Roundtable.

Event Invitation: 

Growing Green Bonds for Clean Energy-Roundtable

When:  10:30am -14:30pm Friday 19^th May 2017.

Where: Casuarina, India Habitat Centre, IHC Complex, Lodi Road, Delhi.

Registration: Email  etandon@nexant.com  and  bsneha@nexant.com direct.

What’s it all about:

The Government of India has set a national clean energy target of 175 GW of renewable energy capacity by 2022, of which 57 GW has been installed so far.

Green Bonds have started playing a role in financing this capacity, and are expected to play a significant role in funding future renewable energy capacity addition.

The Roundtable will explore how an Indian green bonds market that benefits clean energy can be accelerated. 

Hear about the experience of the pioneer Indian green bond issuers, the expectation of Indian institutional investors and about the support provided by USAID to prospective issuers under PACE-D TA program.

Is this Roundtable important for you?

Yes, if you are an asset owner, fund manager, bank, market regulator, fixed income or debt specialist, clean energy supplier or global infrastructure investor.  

Registrations Now Open

A limited number of places are open to participate in the Roundtable.

Registrations can be made direct to etandon@nexant.com  and  bsneha@nexant.com.

The Last Word

Don’t miss this chance to engage and discuss first hand the prospects for clean energy and green bonds investment to support India’s climate plans and 175GW by 2022 renewables target.

We’ll see you in Delhi on the 19^th. 

Till next time, 

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

Profiling low carbon investment opportunities in energy, agriculture and infrastructure. 

The 2017 Executive Dialogue is a parallel session to the Brazil Investor Forum in São Paulo on May 30th.  

The Climate Bonds Initiative is convening an Executive Dialogue 2017 profiling Brazil’s emerging green bond market and investment opportunities in Agriculture, Energy &Infrastructure.

This Invitation Only event in will include an interactive panel discussion involving 50 global investors and CEOs focusing on investment prospects and plans across these three key sectors.

Participants will have the opportunity for open dialogue on accelerating investment in sustainable growth, consistent with Brazil’s environmental and economic development goals.

The Climate Bonds Executive Dialogue 2017 is a side event in support of the Brazil Investment Forum 2017 that will see international political, corporate and investment leaders gather in São Paulo to discuss national investment and business collaboration.

The Investment Forum will form the backdrop for the launch of the new $20bn Brazil- China Investment Fund.

An Opportunity in São Paulo

The Executive Dialogue is a once only gathering, providing a unique forum for participants to engage directly with their peers on the new economy and low carbon investment directions in new infrstructure and major industry sectors.

Dialogue Agenda:

12: 40 Chair’s Welcoming Remarks:

Justine Leigh-Bell

Director Market Development, Climate Bonds Initiative

13:00 Lunch

13: 20 Moderated Panel Discussion:

•  Sean Kidney, CEO, Climate Bonds Initiative
•  Marcelo Vieira, President of SRB (Sociedade Rural Brasileira)
•  Milton Menten, Executive-Director of EcoAgro
•  Tatiana Rosito, former Executive Secretary of CAMEX
•  André Salcedo, Head of Capital Markets of BNDES
•  Guilherme Hirata: Executive Manager of Corporate Finance Suzano Papel e Celulose
• John Liu, CIO, Zurich Brasil

14:30 Close

Are you in São Paulo on the 30th?  

A limited number of seats are still available at the Dialogue.

Please contact Mariana Caminha at Climate Bonds Brazil Communications and Institutional Relations for further information.

We look forward to your company,  

Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

Stock Exchanges can set the next stage of green bonds growth: New paper from Climate Bonds and Luxembourg Green Exchange.

National exchanges are uniquely placed to support the next phase of green finance expansion, green bond growth, market standards and harmonisation. 

What’s it all about

The Climate Bonds Initiative in collaboration with Luxembourg Green Exchange (LGX) launched “The role of exchanges in accelerating the growth of the green bond market,” outlining steps for national stock exchanges to boost green finance.

A number of stock exchanges were consulted during the preparation of the paper including the London Stock Exchange (LSEG), Nigerian Stock Exchange (NSE) & Borza Italian (BI).

Backdrop to the discussion paper

The growth of the global green market has been tumultuous, with 2016 setting a new record for issuance at USD 81bn.  

2016 and early also 2017 saw many governments begin development of their country climate plans for achieving COP21 NDC targets.

Ingredients to meet these targets include increased green infrastructure investment, more sovereign green issuance, and the development of green bond markets to improve market liquidity, integrity and investor access to green finance opportunities.  

Exchanges are now a critical ingredient to scaling up of the green bond market to support growth beyond the USD100bn to USD 150bn range forecast for this year.

With the right settings in place Climate Bonds believes USD 1tn in green bonds by 2020 is achievable.

Six major recommendations for exchanges:

1. Developing green bond guidelines in order to pave the way for green bond issuances and listing.
2. Promoting transparency and encouraging the development of common practices that increase investor confidence.
3. Establishing green bond lists or segments that enable investors to easily discover and invest in assets addressing to climate change.
4. Supporting green bond indices or ETFs and thus make it easier for investors to track the performance of green bonds and compare returns and volatility with other investments.
5. Fostering market dialogue and collaboration among all market participants, including regulators, investors, issuers, rating agencies, international standard-setting bodies, certifiers and auditors.
6. Fostering market education and assisting investors in understanding wider climate risks and opportunities.

Who’s saying what?

Jane Wilkinson, Head of Sustainable Finance, Luxembourg Stock Exchange:

“We decided to write the report together with CBI as we understand the vital role of stock exchanges in promoting sustainable finance.”

“Since the launch of the Luxembourg Green Exchange (LGX), a platform dedicated to green bonds, we have observed a growing interest of both investors and issuers: over the last seven months, the overall value of green bonds on our platform has grown by 30%, to 50.3billion EUR.”

“We encourage other stock exchanges to embrace the green market opportunity and join us in supporting the continued development of sustainable finance.”

Sean Kidney, CEO Climate Bonds:

“Green finance and green investment needs to shift up several gears in both scale and reach to support country climate plans and low carbon infrastructure development. “

“Stock exchanges occupy a pivotal position across national and international capital markets. This discussion paper reflects the increasing significant role they have to play in the acceleration of green investment and it canvasses various action steps for exchanges to adopt in developing green bond markets.”

“The lead undertaken in the last few years by exchanges like Luxembourg, London and the Sustainable Stock Exchange Initiative (SSE) now needs expansion.”

Green Bond Listing Leaders  

A number of exchanges have established specialised green bond listings or dedicated segments enabling institutional investors to easily discover and invest in assets addressing climate change.

They also improve and encourage secondary market trading.

Lists or segments can also play a role in ensuring the environmental integrity of the market by exchanges requiring issuers to provide a second or third party review of the green credentials of the bond in order for it to be included in their lists.

Current Exchanges with a List or Segment

• Oslo Stock Exchange launched a Green Bond list in January 2015;
• Stockholm Stock Exchange launched a Sustainable Bonds list in June 2015;
• London Stock Exchange created its Green Bond list in July 2015;
• Mexico Stock Exchange in August 2016;
• Luxembourg Stock Exchange in September 2016;
• Borsa Italiana Green & Social Bonds list launched March 2017.

Why Green Bond Indices?

A green bond list guarantees adherence with certain green criteria but it does not track the financial performance of the included bonds or identify environmental risks embedded in the financial market.

Green Bond Indices could make it easier for investors to track the performance of green bonds, and compare returns and volatility with other investments.

• Solactive Green Bond Index Series launched on 12^th March 2014
• S&P Dow Jones Green Bond Index launched on 31 July 2014
• Barclays & MSCI Green Bond Index launched on 13^th November 2014
• Bank of America Merrill Lynch Green Bond Index launched on 30^th October 2014
• ChinaBond China Green Bond Index Series launched on 15^th April 2016
• ChinaBond China Climate-Aligned Bond Index launched on 2^nd September 2016
• CUFE-CNI Green Bond Index Series launched on 20^th March 2017

The last word

Engaging more exchanges in the green bond market is becoming integral to market development at the speed needed to confront climate change.

Progress in green finance and green investment must also be measured in part against the COP timetable.

At COP24 in 2018, Parties will collectively take stock of countries’ emissions reductions, and then update their NDCs or submit new ones for COP26 in 2020.  A regular “Global Stocktake” will take place every five years starting in 2023.  

Achieving the global target of $1trillion in green bonds by 2020 can help fund the climate plans needed to match these commitments.

This level of capital formation will require more exchanges to adopt some of the measures in this paper.  More collaboration, support for market integrity measures, harmonisation of standards and active secondary markets in this critical period of green finance expansion flowing to 2020.  

Working with exchanges to support nascent markets and wider harmonisation is now firmly on the Climate Bonds agenda.

With support from issuers and investors we see this as another avenue for climate action around green finance.

Download the discussion paper here,

‘Till next time,

Climate Bonds

Disclosure: LSEG are a Climate Bonds Partner. A full list of Partners can be found here.

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or investment product is for information purposes only. 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 endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision. 

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.