Jan 2015 media digest: stories in FT, India’s Economic Times, Reuters, Bloomberg and more!
2014 has been a breakthrough year for green bonds with issuance reaching US$36.6 billion. Media coverage matched the momentum. Here is what media have been saying so far in 2015:
Financial Times, Are green bonds a fair weather phenomenon?, by Ralph Atkins
Author of the article says that enthusiasm for green bonds is currently running high and talks of ‘an exponential growth’. He also wonders if green bonds will be resilient to potential storms hitting the global financial systems:
Still, at least two factors mean green bonds could yet end up outperforming other bonds. The first — negative — reason is that the market’s small size and novelty means liquidity is stickier: green bonds would not be the easiest to sell in a panic. A second — more positive — reason is that green bond owners are likely to be long-term investors holding them to maturity.
A recent Bank of America Merrill Lynch note argued that green bond prices were not only similar to non-green bonds, they were also “less volatile than counterparts, which may be driven by their perceived safety and longer-term investor base with lower churn rates”.
Economic Times, Growing Money on Trees, by Naina Lal Kidwai
An article by the CEO of HSBC India challenges long-rooted ‘myth’ that sustainability and finance are at odds. In the context of the enormous infrastructure needs that India is faced with, she says that sustainable finance is fundamentally about channelling capital to India’s real economy needs.
The author, who is also a member of the UNEP Inquiry International Advisory Council, talks about green bonds as an example of mobilising India’s debt capital markets. She also reveals PACE-D and Climate Bonds Initiative’s plans to launch the India Green Bonds Market Development Committee.
Global Capital, Clean energy agencies push for green bond market in India, by Christina Khouri
PACE-D and Climate Bonds Initiative’s recommendations for creating a green bonds–friendly financial environment in India also resonates in Global Capital.
PACE-D and the Climate Bond Initiative suggest a focus on attracting long term investors through credit rating improving facilities. They recommend that India seeks support from the Green Climate Fund — a United Nations backed body that helps developing countries that are limiting or reducing their greenhouse gas emissions
Reuters, 'Green' bond issuance booming, but standards are unclear, by Michael Connor
Reuters highlights the importance of green definitions in maintaining green bonds market integrity. The author says that bankers and activist worry that ‘lack of enforceable Standards for what is green will stunt the market.’
Issuance of green bonds for companies working on battling climate change are booming, but investors say the label needs safeguards against bogus proposals that could sour retail buyers and wealth advisers just starting to tune into the securities.
Global Capital, 2015: a year of tests and risks, by Jon Hay & Toby Fildes
Jon Hay and Toby Fildes claim green bonds to be one of the themes that will shape global financial markets in 2015. Who are we to argue?
The cynics have been silenced. SRI capital markets, and in particular, green bonds, joined the mainstream last year. (…) Attitudes, particularly within banks’ sales and origination teams, are changing. Whereas a year ago the mention of ‘Green’ or ‘SRI’ tended to bring a roll of the eyes and accusations of hype, fad or window dressing from all but the sector’s most ardent believers, 2014 saw global bond teams swing behind the movement.
Global Capital, Themes for 2015: EM and corps to drive SRI bond market to new heights, by Craig McGlashan
A look at the market developments over the past year and potential for green bonds issuance in emerging countries.
Cynics might question whether the explosion in green bond issuance will maintain its force in 0215 after a year of rocketing growth. But with an ever expanding universe of issuers and a market maturing in structure, issuers and bankers are confident that this year could be even more spectacular
Bloomberg, Record Green Bond Issuance Bolsters Chicago Sewers: Muni Credit, by Elizabeth Campbell
The Bloomberg journalists looks at the fast-expanding municipal green bonds market.
U.S. municipalities are selling a record amount of debt earmarked for environmental projects as a growing appetite for the bonds pulls in issuers from the nation’s capital to Chicago’s water district. (…) Green-bond sales by municipalities will keep climbing, said Tess Olsen-Rong, a market analyst in London at Climate Bonds Initiative. Environmentally conscious investors often want to know where proceeds are going, and municipal offering documents provide transparency, she said.
Corporate Knights, Going big with green bonds, by Bernard Simon
An in-depth look at the green bonds market developments. Author talks about the ‘explosive growth’ that creates demand for standards and transparency.
Which projects deserve to be classified as green? Who is best qualified to be the judge? Should there be a single set of international standards for green bonds? Should such standards be voluntary or mandatory? The answers to such questions will determine the future credibility of the green bond movement.
Year 2014 Green Bonds Final Report & Underwriters League Table
There has been a lot of coverage following our release of the 2014 final green bonds figures. Look out for the recurring phrase: ‘tripling of issuance’!
- Wall Street Journal Money Beat, Green Bonds Bloom In 2014, by Mike Cherney
Sales of new green bonds, which help pay for environmentally friendly projects, reached $36.6 billion in 2014, more than triple the issuance from the previous year
- Forbes, $36.6B In Green Bonds Issued Last Year, by Anne Field
That brings the total amount of outstanding green bonds to $53.2 billion.
- Environmental Finance, Green bond market "to grow by $100bn this year", after smashing records in 2014, by Sophie Robinson-Tillett
Corporate issuers were, for the first time, hot on the heels of the development banks, with 33% or $12 billion of the 2014 issues.
- Business Green, Green bond market hits record $36.6bn in 2014, by Will Nichols
Climate Bonds Initiative said the $12bn of corporate issuances created depth in the market and offered a range of currencies, which improved liquidity in the market.
- The Fifth Estate, 2014 the biggest year ever for green bonds
Large development banks still accounted for most of the issuance, with 44 per cent of the total figure.
- Blue & Green Tomorrow, Green bond issuance triples in 2014, by Charlotte Malone
The European Investment Bank was the overall top green bond issuer for the year, with bonds amounting to $5.6 billion
- SeeNews Renewables, CBI says USD 36.6bn of green bonds issued in 2014, by Tsvetomira Tsanova
For comparison, just USD 10 billion of such bonds were issued in 2013, which means the market grew more than three times in a year
- Clean Technica, Green Bonds Market Tops $36.6 Billion, 3 Times 2013, Joshua S Hill
Sean Kidney, chief executive of the Climate Bonds Initiative, said that he expected the green bonds market to reach $100 billion in 2015.
- Energy Live News, Green bonds hit ‘record $36.6bn in 2014′, Priyanka Shrestha
Data released by the Climate Bonds Initiative reveal 73 different issuers made up the market in 2014
- The Sustainability Report, Green bond issuance hits US$36.6 billion for 2014, by Rachel Alembakis
- Ethica News, Green bond, il futuro è certificate
- Environmental Finance, SEB clings on to green bond underwriting crown for 2014, Peter Cripps
The 2014 underwriters’ league table released in January found SEB on the top for a second consecutive year. Environmental Finance reports:
Scandinavian bank SEB narrowly maintained its position as leading underwriter in the green bond market in 2014.(…) However, SEB’s ascendency in the rapidly growing market has come under sustained pressure from rivals in 2014, with Bank of America Merrill Lynch (BAML) and Credit Agricole increasing breathing down its neck.
Environmental Finance, Green bond pioneer reflects on record-breaking year, Peter Cripps
Christopher Flensborg, head of sustainable products and product development at SEB, reflects on a record breaking year, value of second opinions, market prospects in 2015 and SEB’s victory in the green bonds underwriters’ race.
“Topping the league table is not our prime focus, but we can continue to be among the biggest underwriters,” he tells Environmental Finance. “At SEB we have four people dedicated to green bonds – we are quite well equipped to continue to be a strong player. I am convinced we will continue to be near the top.”
Guardian Sustainable Business, Beyond Wall Street: the encouraging growth of new financial models, by Rosalinda Sanquiche
An interesting take on the growth of new financial models; author sees green bonds as an example of application of the circular economy models.
While circular finance has long been modelled in local economies, the concept is now being applied more broadly. As the Green Transition Scoreboard, Green Bonds Growing Green Infrastructure highlights, bond offerings specifically labelled “green” grew by 80% in 2013 and 2014.
RTCC, China and US drove renewable investment growth in 2014, by Megan Darby
Commenting on the Bloomberg New Energy Finance data that indicated 16% increase in clean energy investment in 2014, RTCC lists growth of the green bonds market as a part of that broader global trend.
The growth was driven by a fivefold increase in corporate bonds, with energy companies, consumer goods firms and banks catching on to high demand. The Climate Bonds Initiative predicts another US$100bn will be issued in 2015, as the market scales up.
Climate Wire, Some investors drop coal stocks to boycott the industry; others buy 'green bonds' to make money,
Author talks about the expansion of green bonds in the context of financial boycott against buying fossil energy industry equities led by the Stanford University, the University of Glasgow and the Rockefeller Brothers Fund. Another evidence of a global trend towards renewables?
Meanwhile, buyers were plunging money into a less known but kindred strategic move. They were buying a relatively new product, "green bonds," which showed significant promise in 2014 as an economic tool to address climate change.
Alternative Energy Stocks, A Flurry Of Green Muni Bonds, by Tess Olsen-Rong (Climate Bonds Initiative Market Analyst)
Green municipal bonds are set to take off in 2015 after a flurry of issuances in the latter half of 2014. With interest rates at an all time low, this is the time to finance the vast backlog of infrastructure upgrades and developments needed – and to green that infrastructure.
Portfolio Institutional, Green bonds come of age, Laura Nishikawa (Head of fixed income ESG research)
In the context of slumping oil prices, Nishikawa says that green bonds are one asset class that maintains the consistent interest from institutional investors.
In three years, the market for green bonds has gone from a niche investment, where low yielding instruments, issued by highly-rated development banks and supranational issuers were pitched for a relatively small audience; to a burgeoning asset class, issued by utilities, corporates, REITs, banks, local governments, agencies, and even ABS, to a broader institutional investor base, comprising of both dedicated “green” investment and broader-based fund managers and pension funds.
