Climate Bonds Initiative is the only organisation in the world working to mobilize the largest capital market of all, the $100 trillion bond market, for climate change solutions.
We promote investment in projects and assets necessary for a rapid transition to a low-carbon and climate resilient economy. The strategy is to develop a large and liquid Green and Climate Bonds Market that will help drive down the cost of capital for climate projects in developed and emerging markets; to grow aggregation mechanisms for fragmented sectors; and to support governments seeking to tap debt capital markets.
Climate Bonds Initiative is an investor-focused not-for-profit. Our work therefore is an open source public good and is falls into three workstreams.
1. Market tracking & Demonstration projects
- Reporting on Climate Bond developments
A core network development is the Climate Bonds blog, designed as both a journal of record for relevant bond issuance and as commentary style update on industry and government developments material to fixed income investment in climate solutions.
- Sizing the Climate Bonds universe
To overcome the perception of a niche market and demonstrate the opportunities available to investors, the Climate Bonds Initiative undertakes an annual survey of bonds outstanding globally related to climate change. The 2014 report showed $502.6 bn outstanding of which 90% were investment- grade. Each year the report is presented in seminars in multiple countries and via briefings for banks and investors.
The global survey is funded by HSBC. Sponsorship opportunity available for regional editions of the report.
The Climate Bonds Standard and Certification Scheme is is a FairTrade-like labeling scheme for bonds and the key project of Climate Bonds Initiative. It is designed as an easy-to-use tool for investors and governments that assists them in prioritising investments that truly contribute to addressing climate change.
The Standard is a public good resource for the market.
- Climate Bonds Taxonomy is the backbone of the standards work – it defines investments that are part of low carbon economy.
The Climate Bonds Standard is overseen by a Board representing $32 billion of assets under management. Board members are California State Teachers’ Retirement System (CalSTRS), the State Treasurer of California, the (US) Investor Network on Climate Risk, the Natural Resources Defense Council, the Carbon Disclosure Project, the (Australian) Investor Group on Climate Change and The International Cooperative and Mutual Insurance Federation.
The Board has already created standards for wind and solar energy bonds. Green buildings and Low Carbon Transport criteria are to be released soon and expert committees are working on developing criteria for Bioenergy, Agriculture and Forestry & Water investments.
Rapid change at very large scale will depend on a close working relationship between government, finance and industry. The Climate Bonds Initiative is developing policy proposals for all three sectors, including:
- How to boost bank lending to renewables by adapting the $3 trillion covered bonds market to create renewable energy covered bonds.
- Delivering on the promise of large-scale energy efficiency (e.g. getting to 85% of housing stock within 10 years).
- Policy risk insurance for renewable energy bonds, to be provided by a consortium of governments.
Pro bono legal advisors: Shearman Sterling LLP