Compiled by Rozalia Walencik for the Climate Bonds Initiative
The 21st Conference of the Parties in Paris last month will be remembered as the first climate accord in decades. We’re yet to find out if it becomes a turning point for climate – but the odds are in our favor. Parties agreed to “pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels”.
Green bonds were firmly on the agenda in Paris and many speakers named them a successful example of financial innovation.
December’s digest includes media reports following the launch of the Climate Aggregation Platform, Paris Green Bonds Statement and publication of the report ‘Scaling Green Bond Markets - Guide for the Public Sector’.
An important piece of news post-COP was the launch of the new guidance on green bond issuance by the People’s Bank of China’s (effectively China’s national green bonds standards).
COP21
Firstly, do watch the video from the Sustainable Innovation Forum (SIF15) - the largest business focused event held during the annual Conference of Parties (COP). A very interesting discussion between Eric Usher, UNEP FI, Sean Kidney, Climate Bonds Initiative, Miguel Albero, Santander, and Michel Madelain, Moody’s.
Sean Kidney warmed up the room saying that ‘innovation’ doesn’t appeal to institutional investors. He advised people to concentrate on the terms ‘safe’ and ‘secure’, both of which happen to be a characteristic of the green bond market.
Alternatively follow this link to watch.
Financial Times, Bond investors look for greener pastures, Gavin Jackson
Author argues that numerous COP21 climate finance commitments will directly translate into further growth of the green bonds market.
As François Hollande spoke against climate change at the Paris COP21 summit, three French banks launched green bond programmes — Société Générale, Crédit Agricole and BNP Paribas — highlighting the role these securities can play in public relations strategies.
Guardian, Innovative finance has a major role to play in tackling climate change, Judith Rodin
Judith Rodin stresses the role of innovative financial instruments in the global warming battle and predicts COP21 delegates to sing the song of praise to green bonds.
Green bonds have been described as a game changer in the fight against global warming. With more than $50bn (£33bn) in green bonds expected to be issued this year – and more than $532bn mobilised in wider mitigation and adaptation projects – delegates at this week’s climate talks in Paris will surely sing their praises.
Le Figaro, L'essor des obligations vertes, Anne Cheyvialle
In an article titled ‘The rise of green bonds’, French journalists argues that growth of the green bonds market has been directly accelerated by the COP21 proceedings.
«Green bonds» ou obligations vertes. L'appellation est attrayante, signal d'engagement pour la planète contre le réchauffement climatique. Cet outil de financement de la transition énergétique vers une économie bas carbone connaît un essor rapide, accéléré par la COP21.
Global Capital, Green activity ramps-up as climate change conference approaches, Lewin McLellan
Summary of the growing activity in the green finance area, linked to the Paris conference. Report includes launch of the public consultation for the proposed Climate Bond Standard for water bonds.
European Investment Bank has launched its first equity index-linked bond dedicated exclusively to renewable energy and energy efficiency projects as the Climate Bonds Initiative begins a public consultation on a proposed standards for water bonds.
Environmental Finance, Financial innovation -- key to climate action, Rana Kapoor
In the ‘COP blog’ for Environmental Finance, CEO of Yes Bank, talks about green bond’s success stories of Indian financial institutions.
One of the key decisions that need to emerge out of COP21, is to materialise and accelerate the $100 billion committed by the developed world under the Green Climate Fund (GCF) to support climate action initiatives in developing and least developed nations.
Market Watch, With Paris Climate Summit under way, green bonds see record issuance
COP21 talks kicked off with the announcement of $8 bn worth of green bonds issued in November alone, making it the biggest month ever. Market Watch reports.
Just as international climate talks were commencing in Paris this week, the green-bond market celebrated a record. According to the Climate Bonds Initiative (..) November was the strongest month on record for global green-bond issuance, with $7.39 billion in new bonds.
Eco-Business, Green financing gaining “unstoppable momentum”, Jean Chua
Author of an upbeat story in Eco-Business predicts the Paris deal to give climate financing another boost.
Experts speaking at the panel said the good news is that the ramping up of climate financing is “unstoppable” because of the national commitments that more than 190 countries have made ahead of the climate change talks this week.
OOSKAnews, Rising Waters at the Paris COP, John H. Matthews
In a strongly-argued opinion piece, John H. Matthews, co-founder of AGWA and a member of The Water Infrastructure Technical Working Group under the Climate Bonds Standard, claims that the water community’s influence at the COP21 was unprecedented.
To my surprise, the potential for mobilizing existing finance to enable climate mitigation and adaptation goals - while also acknowledging the special role of water in climate - went viral during the COP as a model for how to amplify dramatic change and fuel effective implementation, appearing in at least a dozen sessions during the conference.
Your Renewable News, Climate Bonds welcomes COP21 Paris Agreement
Sean Kidney endorses the COP21 Paris Agreement and says that individual country plans (INDCs) create an enormous opportunity to deploy green and climate bonds financing.
“Together with other organisations at COP 21 we launched a new Climate Aggregation Platform (CAP), the Green Infrastructure Investment Coalition, and coordinated the Paris Green Bond Statement of the world’s leading global investors. Many other financial initiatives were also announced in Paris. This Agreement now gives their implementation a firm and enduring foundation.”
EJ Insight, Asia green projects to get more financing after Paris summit
The climate change talks that took place in the last two weeks in Paris, with key leaders from Asia in attendance, may spur further growth, with governments executing policies promoting clean energy more successfully.
Edie.net, COP21 Day 5 review: Stock rising on green finance
Fifteen of the world’s 20 largest banks totaling close to $2 trillion in market value have now made commitments to green bonds, while more than one-third (609) of the 2,000 largest companies in the Forbes 2000 are engaged on the UNFCCC’s NAZCA listing (Non-State Actor Zone for Climate Action).
PARIS GREEN BONDS STATEMENT
COP21 saw twenty-seven global investors representing over USD 11.2 trillion of total AUM issue the ‘Paris Green Bonds Statement,’ (PGBS). Signatories committed to support policies that drive the development of long term, sustainable global markets in green bonds.
Financial Post, Two Canadian money managers sign off on Paris Green Bond Summit, Barry Critchley
In all, the 27 managers have US$11.2 trillion under management. Wednesday’s agreement calls on industry experts and stakeholders to develop clear standards for the climate change impacts and benefits of bond financed projects; for bond issuers to ensure transparency around the use of bond proceeds and their impact and for governments to develop projects that can be financed by green and climate bonds.
ETF Strategy, ESG ETFs gain traction as responsible investing comes of age, James Lord
Issuance of green bonds, those which raise finance for environmentally sustainable investments, have grown recently to $41bn as of early December. Furthermore, the Paris Greens Bond Statement is an understanding, signed by 27 global investors representing over $11.2tn in assets, to fully support policies that drive the development of a global market in green bonds.
CLIMATE AGGREGATION PLATFORM
Announced at COP21, the Climate Aggregation Platform (CAP) is an initiative to promote financial aggregation solutions to help increase capital available for small-scale energy investment in developing countries. The Climate Bonds Initiative alongside the United Nations Development Programme (UNDP) will be responsible for implementing the program. Our media release here, media reports below.
Independent Online, Initial $2m for green energy from COP21, Edna Chirimamombe
The initiative, Climate Aggregation Platform (CAP) (…) aims to help build pipelines of standardised, low-carbon energy assets in developing countries and to develop low-cost sources of financing, tapping new and diverse investor bases.
Energy Live News, Green investment initiative for developing nations, Jacqueline Echevarria
The Global Environment Facility (GEF) will invest $2 million (£1.3m) to start the initiative, which expects to leverage more than $100 million (£65m) in co-financing from different partners, including the Inter-American Development Bank (IDB).
ABS-CBN.com, Renewable energy: Bright spot at Paris climate talks, Apples Jalandoni,
The Global Environment Facility (GEF), the largest public funder for environmental projects, will provide $2 million in initial funding to help kick-start the formation of the Climate Aggregation Platform (CAP) in 2016.
The Sun, Renewable energy will reduce climate risk by 1.7g annually, Sam Otti
“We need to rapidly ratchet up financing support for clean energy in developing countries. I’m delighted to announce the launch of the Climate Aggregation Platform to help spur strategic and transformative investments and to accelerate energy efficiency,” said Naoko Ishii, GEF CEO and Chairperson.
GREEN INFRASTRUCTURE INVESTMENT COALITION
The coalition was launched at COP21 by an alliance of global investors, development banks, financial sector associations & NGOs. Its aim is to support the financing of a rapid transition to a low-carbon and climate resilient economy.
PV Tech, PV Talk: Governments need to pull their heads out of the sand on clean energy investment, Ben Willis
Ahead of the COP, Sean Kidney spoke to PV Tech about his expectations for the Conference of the Parties and revealed plans for the launch of the coalition.
Speaking to PV Tech ahead of the event, he reveals why he is confident that a transition to a low-carbon economy through investment in new technologies such as solar can happen as long as national governments make the right choices.
Business Standard, Ficci joins Green Infra Investment Coalition at COP21 in Paris
A key task for the coalition will be to look for ways to bridge risk gaps to ensure that investment profiles can meet the needs of institutional investors, it added.
Your Oil & Gas News, COP21 launch of Green Infrastructure Investment Coalition
Foundation members are the Climate Bonds Initiative, the Principles for Responsible Investment, UNEP Inquiry and the International Cooperative Mutual Insurance Federation (ICMIF).
Property Investor Europe, Green Infrastructure Investment Coalition founded at Paris COP21Public Sector Energy, New investment coalition launched for green infrastructure
PRI News, Green Infrastructure Investment Coalition launched at COP21
ICMIF News, Green Infrastructure Investment Coalition launched at COP21
REPORT 'SCALING GREEN BOND MARKETS - GUIDE FOR THE PUBLIC SECTOR'
Green Bond Policy Report launched at COP by Climate Bonds and UNEP Inquiry offers public sector players detailed action plan & best-practice examples for how to grow green bond markets.
UNEP News Centre, Climate Bonds and UNEP Inquiry Launch Green Bond Policy Report 'Scaling Green Bond Markets - Guide for the Public Sector'
Detailed action plans and international best practice examples on how to grow green bond markets are included to assist in policy development. The application and mix for each country will depend on the specific macroeconomic context and policy priorities.
Business Green, Green bond best practice guide released for public sector, Jocelyn Timperley
"This guide can help the public sector in translating aspects of their national INDC [climate action] objectives into climate finance outcomes," said Sean Kidney, chief executive of the Climate Bonds Initiative, in a statement. "Adding green bonds into the climate finance mix can help the shift of capital to low-carbon projects, infrastructure and climate-resilient.”
CHINA'S NATIONAL GREEN BONDS STANDARDS
Just before Christmas the People’s Bank of China (PBoC – China’s central bank) announced new regulations for bank green bond issuance. Following the COP21 agreement, that was a cherry on top.
Reuters, China central bank unveils rules on green bond issues, Kevin Yao
China's central bank on Tuesday published rules on issuing green bonds by policy banks, commercial banks and other financial institutions, a step toward addressing environmental problems.
Shanghai Daily, PBOC launches green bond market, Feng Jianmin
The People’s Bank of China said projects that fall under green bond catalog will be able to issue bonds in the market.
Times of India, China to encourage non-financial firms to issue green bonds
The move comes after the People's Bank of China (PBoC) allowed policy banks, commercial banks and other financial institutions to issue green bonds in its interbank market this month.
The Wall Street Journal, PBOC Allows Financial Institutions to Issue ‘Green Bonds’
Central bank says proceeds of the bonds should only be used to support green industries.
Environmental Finance, China releases national green bond standards, Hamza Ali
The Green Projects Catalogue (GPC), developed by the People’s Bank of China’s (PBoC) Green Finance Committee, provides a set of standards for screening which assets and projects are eligible to be financed using green bonds.
Carbon Pulse, China issues green bond rules to scale up clean energy investment, Stian Reklev
Under the rules, preferential policies would be given to banks and other lenders that issue green bonds as part of China’s efforts to meet a number of targets on climate change, carbon emissions, and air, water and soil pollution.
OTHER MARKET DEVELOPMENTS
Global Capital, Green Bond Market must be a broad church
A voice in the debate on the issue of additionality of projects funded by green bonds.
Sean Kidney and Manuel Adamini of the Climate Bonds Initiative and Bas Wetzelaer of Dutch investor Actiam argue that the market should embrace a wide range of issuer and deal types, as long as the activities financed genuinely help the climate.
Environmental Finance, Developing the Latin American green bond market, part two
Part two of the Environmental Finance roundtable on green bonds in Latin America. This time, participants, including Sean Kidney of the Climate Bonds Initiative, explored the role of governments and multi-lateral development banks in scaling this market.
Sean Kidney: There are a lot of regulatory measures that can support investing. There are fiscal incentives that should be considered, such as Mexico's withholding tax Kurt mentions. There is an interesting study that looks at the differential tax rates for accelerated depreciation of renewables in Norway and Sweden. In Sweden, the accelerated depreciation was about 15% higher. And 'voop', there was a renewable energy boost.
Environmental Finance, Advanced Topics in Green Bonds: Rewards, Phillip Ludvigsen
In a follow–up to an earlier article, that explored potential risks of investing in green bonds, author summarises financial and non-financial advantages of going green.
Although anecdotal, there are a growing number of examples of pricing premiums paid in the primary markets. A presentation by Dentons law firm indicated that observers of the Vornado Real Estate green bond deal saw a pricing advantage of 10 to 15bps.3 For its most recent green bond offering, DC Water stated it enjoyed a lower cost of capital of "2 to 6bps"4. HSBC recently saw significant enhanced interest in its first green bond because the "deal was green."
Bloomberg, Part of $7 Billion Financing Plan in Finland Is Set to Go Green, Leo Laikola
Bloomberg reports on Finland’s Municipality Finance plans that might produce country’s first green bond.
SEB strategist Mats Olausson says there’s “good potential” for green bonds next year in Finland. “The recent climate deal in Paris should support more companies and investors integrating sustainability into their business strategies,” he said.
Clean Technica, Renewable Cities Calls To Action, Zachary Shahan
A synopsis of the panel discussion at the Renewable Cities Global Learning Forum.
Sean Kidney, CEO and cofounder of the Climate Bonds Initiative, followed John to throw a serious wakeup call on how much catastrophe we are ordering for ourselves by not transitioning off of fossil fuels much more quickly. He also quickly summarized the climate bonds work he and others are doing.
Clean Technica, Labeled Green Bonds Issuance Crosses $40 Billion In 2015, Smiti Mittal
A total of $40 billion worth of labelled green bonds were issued in 2015. According to the Climate Bonds Initiative, the milestone was achieved in December, and the total issuance last year was $36.59 billion. As of the 23rd of December, the total issuance for 2015 stood at $41.8 billion.
