The Climate Bonds Initiative (CBI) and the World Business Council for Sustainable Development (WBCSD) have announced a new partnership designed to drive the development of low-carbon finance that can help address sustainability and climate challenges.
Why a MoU?
Since 2007 the overall green bond market has demonstrated a compound annual growth rate of 50%, proving that it is an efficient capital intermediary between green/climate projects and investors.
However, the corporate green bond market is still relatively small. In 2015, corporates issued USD 13.6 billion compared to overall green bond issuance during the year of approximately USD 41.8 billion.
WBCSD and CBI believe that the corporate market will gain further scale once the benefits of green bonds are better understood and the lower financing costs outweigh verification and reporting efforts.
In addition, developing robust, liquid and transparent green bond markets will help to drive down the cost of capital for low-carbon projects across both established and emerging economies.
What’s in the MoU?
Both organisations agree to work jointly on the development of the corporate green bond market and will use the Paris Agreement to leverage the synergies between designated WBCSD activities including the groundbreaking Low Carbon Technology Partnerships Initiative, and specific CBI ventures like the Green Infrastructure Investment Coalition (GIIC).
Together both organisations will look to opportunities to bring together their respective stakeholders to add a new dynamic for corporate green bond issuance.
Both are committed to a range of joint activities directed towards building corporate understanding around the opportunities and challenges of green bonds and improving awareness of the role of Climate Bonds Standards in certification and assurance.
Who’s Saying What?
Peter Bakker, President and CEO of WBCSD: “Green finance is a critical part of the transition to a low-carbon economy, and we have an exciting opportunity to support the development of that market through this partnership.”
“With CBI we aim to uncover new avenues for collaborating with the finance sector on sustainable development.”
“The post-Paris world shows that the momentum for a low-carbon economy is undeniable, and coupled with worldwide initiatives such as the Low Carbon Technology Partnerships Initiative (LCTPi) that will require low-carbon investment, this agreement has the potential to be transformational.”
Sean Kidney, CEO Climate Bonds Initiative: “We are the largest independent green bond organisation, and partnering with a sustainability leader like the WBCSD is exactly the right way to move the post-COP21 business environment forward.
“This partnership presents a significant opportunity to drive the development of corporate green bonds to help address worldwide sustainability and climate challenges.”
“The MoU provides a substantive foundation for cooperative projects to mobilise the finance sector in the development of green finance solutions that support the low-carbon business and economic transition.”
Want to Know More?
The Low Carbon Technology Partnerships Initiative (LCTPi):
The Low Carbon Technology Partnerships Initiative, a joint initiative with the IEA, SDSN and led by WBCSD, recognizes that the transition to a low-carbon economy is business’s biggest opportunity for the foreseeable future. Over 150 companies and 70 partners are using LCTPi as a collaborative platform to develop implementation plans that scale low-carbon solutions across nine areas including climate smart agriculture, renewable energy, energy-efficient buildings, low-carbon freight, low-carbon transport fuels, forests and forest products as carbon sinks, carbon capture and storage, chemicals, and cement.
The Last Word
We look forward to working with the WBCSD around our shared objectives to meet the climate and sustainability challenges we face.
