With the month’s breaking news of the inaugural green bond from Agricultural Bank of China, we begin to see more and more Chinese titles pointing to green bonds.
This month’s digest is divided into four sections: Market developments, China, Climate Bonds Low Carbon Transport Standard & Moody’s report.
Spotlight on Market Developments
Bloomberg, Oil Company Green Bonds Aren’t Contradiction to Zurich Insurance
An important statement from Zurich Insurance: the Swiss giant said it wouldn’t rule out buying green bonds from fossil-fuel producers. Climate Bonds agree – ‘green’ projects from ‘brown’ companies will be an important contributor if we are to reach the scale required for a rapid transition to a low carbon economy.
“We’re not just looking for the green poster children and the greenest of the green,” Manuel Lewin, head of responsible investment for Zurich, said at Environmental Finance’s Green Bonds Americas 2015 conference in New York on Wednesday.
“What the green-bond market can really do is bring people into the picture that maybe aren’t those green poster children, and that can make incremental progress.”
Environmental Finance, The big debate: Pureplay green bonds
Environmental Finance presents two opposite market voices in the debate on pureplay green bonds.
Tanguy Claquin argues that pureplays should not be given a "shortcut" into the green bond market, while Suzanne Buchta argues that a company whose revenues come from green sources should not have to do the additional work entailed with a use of proceeds green bond
Switchboard, NRDC Staff blog, Could high-efficiency homes turn a mortgage backed security into a green bond?, Philip Henderson
In an interesting analysis, Henderson explains why homes are a great fit for green bonds. Note; NRDC is a member of the Climate Bonds Standards Board and the first Climate Bonds Certified Residential Mortgage Backed Security will be issued a little later this year.
High-efficiency homes are environmentally-friendly assets for obvious reasons: more insulation, better air sealing, and better air conditioners, mean utilities must deliver less power.
Business Green, How to invest in green bonds, Jessica Shankleman
A global look at the climate bonds challenge followed by a ‘deep dive’ into green bonds definition, impact on environment and the relentless question: ‘is it really green?’
Green bonds are fast becoming one of the most popular mechanisms for allowing investors to directly back low carbon and climate change adaptation projects, with issuance expected to reach $60bn to $70bn this year. A recent report by the Climate Bonds Initiative, UNEP, and The World Bank predicted that with the right support in place, $1tr of green bonds could be issued a year by 2020, plugging a large chunk of the climate finance gap.
Environmental Finance, Growing the corporate green bond market, Sophie Robinson-Tillett
Robinson-Tillet expresses a slight disappointment in the corporate sector that took the green bonds market by a storm in 2014, but failed to live up to expectations for 2015. She explores how the enormous potential of the corporate sector can be exploited.
More issuance is clearly needed if the asset class is to fulfill its potential, and – after years of leadership from sovereigns, supranationals and agencies and, more recently, from US municipalities – the onus is on the private sector to take up the baton and bring scale to the market.
Bloomberg, EIB Links Green Bonds to Projects in Push for Climate
Bloomberg reports on an important initiative from EIB.
The European Investment Bank is the first issuer to link its individual green bonds to the projects they finance in a second move to respond to the call from world leaders to scale up finance for projects related to climate change.
Storify.com, What will successful climate talks in Paris mean for business?
Storify.com – a portal proving that a good media story can be based solely on a collection of tweets from ‘influencers’ - reports on the joint event of ICAEW, Carbon Credentials and HRH the Prince of Wales' Corporate Leaders Group. Business leaders discussed practical implications of the transition to a low carbon economy. Nick Silver, co-founder of the Climate Bonds Initiative took part.
City AM, Green bonds: London is leading the world in financing the global low carbon shift, Nikhil Rathi
Chief executive of the London Stock Exchange talks about the London Green Bonds conference co-organised by the Climate Bonds Initiative.
While the dominant colour in London this week has been red for the landmark state visit of Chinese President Xi Jinping, today the London Stock Exchange will be adding some green to the palette as we host our inaugural China Green Bond conference in partnership with the Green Finance Committee of the People’s Bank of China.
Pioneers Post, Blackrock backs green bonds, Ellie Ward
News of Blackrock partnership with the Climate Bonds Initiative included in the Pioneer’s Post weekly Global Social Innovation round-up.
The world’s largest asset manager Blackrock has announced it is going into partnership with the Climate Bonds Initiative to support the development of the global green bonds market.
SeeNewsRenewables, Q3 green bonds at USD 6.9bn, JP Morgan tops the underwriters league table, Tsvetomira Tsanova
Our underwriters league table put JP Morgan at the forefront of the race, SeeNewsRenewables reports.
Top of the Q3 table is JP Morgan, underwriting a mix of corporate, development bank and municipal green bonds just over USD 1.1 billion.
SeeNewsRenewables, OVERVIEW - Weak 9-mo for green bonds, but October breaks record, Tsvetomira Tsanova
A concise analysis of market figures for 2015 by SeeNews.
Spotlight on China
Finance Asia, Green Bonds to develop jade hude, Jackie Horne
Article provides an evidence for ‘all eyes being on China’ when it comes to green bonds.
China’s ‘war on pollution’ is having a very positive effect on the development of green bonds as a global financing vehicle. (…) The London-based Climate Bonds Initiative, which advocated capital markets solutions for climate change believes China will become the biggest player by 2018.
China Daily, Britain is an environment exemplar for China, Cecily Liu
China Daily’s London correspondent puts the UK’s Green Investment Bank as an example for China. Its government is now working on setting up a similar institution.
Mabey's views are echoed by Sean Kidney, CEO and co-founder of Climate Bonds Initiative, who adds that the function of the Green Investment Bank is much broader than providing finance, and includes the provision of expert understanding of new areas of renewable energy to provide private-sector participants with reassurance of investment.
Responsible Investor, Analysis: Expect green bond push as China takes on G20 role, Vibeka Mair
Although overshadowed by Xi Jinping selfies with Manchester City footballers, there was an important piece of climate finance news related to the Chinese presidential visit in London last month: China, during its presidency of the G20 next year, will aim to encourage green bonds development, and it has chosen London as a partner for this initiative. Insight from Responsible Investor.
To this end, the UK and Chinese government have agreed a proposal to support the PBoC and the Bank of England to jointly promote cooperation on a green financial system and continue to develop the attractiveness of green finance and the importance of environmental protection.
Shanghai Daily, China takes steps towards green, sustainable finance: official
Yi Gang, deputy governor of the People's Bank of China outlines 3 steps to reform its financial sector towards green. Green bonds are part of the triangle.
"...We will also work on green bonds, green investment funds, green insurance and carbon trading mechanisms. A green financial market will facilitate (the creation) of green financial instruments to continue sustainable finance in a commercially viable way and maintain private investment," he said.
Climate Change News, Climate takes low profile as Xi Jinping visits UK, Megan Darby
Megan Darby doesn’t think climate change got enough attention during the Chinese president state visit. She goes on to explore the story behind the impact of Chinese economy on climate and brings related opportunities into the spotlight.
While China has done an extraordinary job in lifting a billion people out of poverty… it has done that at extraordinary sacrifice to the environment,” said Sean Kidney, head of the Climate Bonds Initiative. That has created an urgent need for environmentally sound investment standards, a challenge Kidney said Chinese bankers increasingly understood.
Agricultural Bank of China Bond
Media reports on the inaugural green bond from Agricultural Bank of China (now Asia’s largest green bond issuer).
Reuters, China Agricultural Bank sells $1 billion debut 'green bond' in London
Agricultural Bank of China, the country's third-largest listed lender, completed its debut sale of $1 billion dual currency bonds late on Tuesday in London - the first "green bond" from a Chinese bank.
IFR, China's ABC relies on Chinese banks for first Green bond, Frances Yoon
Shanghai Daily (print), AgBank issues first ‘green bond’
The bond will be listed on the London stock exchange, with the proceeds to fund eligible green projects, the term sheet showed.
ShanghaiDaily.com, China's first green bond A-rated by Fitch
The Chinese mainland's first green bond, issued by Agricultural Bank of China (ABC) (…) was assigned a long-term A ratings by Fitch, the rating agency on Friday.
Environmental Finance, ABC green bond four times oversubscribed, Hamza Ali
Sean Kidney, CEO of Climate Bonds Initiative (…)_said the issue was the first offshore Renminbi-denominated green bond from a Chinese issuer and was "a trial balloon for Renminbi issuance". "China's central bank has said it will give fast-track approval for banks issuing Renminbi-denominated bonds in the international market. Now watch the China [green bond] market open up," he added.
Finance Asia, ABC in $1bn maiden green bond issue, Ray Chan
The Chinese government plans to invest 3% of its annual GDP in green sectors in China.
Clean Technica, Agriculture Bank Of China Raises $1 Billion Through Green Bonds, Smiti Mittal
Earlier this year, the Climate Bonds Initiative released a report with recommendations on how to increase the green bonds market in China
Spotlight on Climate Bonds Standard for Transport
The Low Carbon Transport Technical Working Group under the Climate Bonds Standard released their proposed eligibility criteria for low carbon transport projects. Media reports below.
Global Capital, SSAs climb new heights in SRI bonds as new standard released, Craig McGlashan
The Low Carbon Transport Technical Working Group (…) says the standard will only certify investment in infrastructure compatible with limiting the rise in global temperature by 2050 to 2°C.
The Fifth Estate, Low carbon transport climate bond standard out for comment
The CBI’s proposed criteria for a low carbon transport infrastructure bond uses universal greenhouse gas emission thresholds defined on a per passenger per kilometre basis for moving people, or a per tonne per kilometre basis for shifting freight.
Spotlight on Moody’s latest report
Widely commented, latest green bonds report from Moody’s presents another evidence of green bonds issuance gearing up for Paris. Standard setting initiatives including Climate Bonds Standard are highlighted.
Business Standard, Moody's: Global green bond issuance lags in 3Q 2015, but likely to rise in Q4
Moody's expects the volume will pick up towards the end of the year to coincide with the December United Nations Framework on Climate Change (UNFCC) Conference of the Parties (COP21) in Paris and is likely to exceed $40 billion for the full year.
The Economic Times India, India to lead green bond market in Asia: Moody's
“India has come up as an early leader in Asia's incipient green bond market and is expected to be a prominent driver of regional issuance in coming years”, Moody's Investors Service today said.
DealStreetAsia, Global green bond issuance fell in Q3, likely to revive, touching $40b for 2015: Moody’s, Liz Lee
“The third quarter also saw more standard-setting initiatives aimed at bolstering green bonds standards as well as issuance. These include the publication of the Green Muni Bonds Playbook, the World Bank Green Bond Impact Report and the Climate Bond Initiative’s proposed eligibility criteria for agriculture, forestry and other land uses,” Moody’s commented.
