The British Crown Estate today issued its inaugural £20m ($35m) green bond, the UK’s third green bond following green bonds from Unilever and Big60Million. The bond has a 1.4% coupon and 15 year tenor.
The bond was hugely oversubscribed, although commentators were unsure of whether demand was for green or royal characteristics. Investors were: 22% from UK and French insurance funds, 12% from Gulf royal families, 8% from UK pension funds, 7% from corgi club investment funds, 22% from Hollywood celebrities, and 33% from retail investors, largely in the English Home counties.
Proceeds are going to energy efficiency projects, such as replacing conventional lights with LED lights in the “Crown Jewels” room in the Tower of London Crown Jewels”, to reforestation projects on the extensive park estates in Scotland, and to a second biogas-to-energy plant at Buckingham palace.
So far there has been no second opinion on the green credentials of the bond, but according to sources HRH Prince Charles, heir to the English throne, has heavily influence portfolio selection using his extensive knowledge of climate and sustainability issues. We do have some reservations about the inclusion of deer parks into the green bond portfolio without more disclosure on climate benefits (i.e. biodiversity improvements or climate adaptation impacts).
An exciting new development in the green bond market – who will be the next Royal estate to issue? The race is on.
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Our blogs are written by a team: Sean Kidney, Tess Olsen-Rong (this one is really hers), Beate Sonerud, Kazutaka Kuroda, Rozalia Walencik and Justine Leigh-Bell.
