Lots of coverage in June Media Digest: The Economist, Institutional Investor, Financial Times, The Guardian, I&PE, La Tribune, Börsen-Zeitung and more!
The Economist, Green bonds channel private-sector funding to the climate
Green bonds and Climate Bonds Initiative once more on the pages of The Economist.
One option is certification offered by the Climate Bonds Initiative (CBI), an NGO. Others opt to get a second opinion from a specialised environmental consultancy such as Vigeo Eiris, or from a large auditor like EY or KPMG. The CBI reckons 85% of bonds issued in 2017 have undergone an external review.
International Banker, Green Bonds are on the rise, Emily Frost
An article that is an in-depth and very valuable story of green bonds market development, key issues it’s facing and prospects for the future. It is also one of several media pieces that, after Donald Trump’s back off from the US environmental commitments, points to green bonds as the sector that is set to continue prospering.
With substantially more investment funds required to be generated, therefore, green bonds are now increasingly considered to be among the most useful instruments to help countries achieve those targets.
Institutional Investor, Investors need better green filter, Joe McGrath
Verifying the „greenness” of the investment is also the key theme of Institutional Investor article.
Investors need better ways of evaluating a fund manager’s green credentials or risk being seduced by investment strategies dressed-up as environmentally friendly.
Financial Times, Deals designed to keep the lights on in emerging markets, Laura Noonan
An interesting article on innovative ways of financing infrastructure investments in emerging economies.
Still, the firm managed to structure financing that included the following: the first climate bond from an emerging market certified by the Climate Bonds Initiative; the first local-currency project bond in the Philippines power sector; the first credit-enhanced project bond in Asia since the 1997 Asian financial crisis; and the first green bond issued in the Philippines.
Global Capital, Green bond bulls run free
Bullish ambitions of the green bonds industry players to see a double-digit share of the market.
Beside emerging market sovereigns, development banks, local authorities, commercial banks and even corporates are likely to start funding through local green bonds markets market players forecast. As many as six new emerging market agencies should issue this year, CBI’s Kidney anticipates.
Reuters, Euro zone debt chiefs cautiously eye sustainable bond options
Reuters says we might soon see sovereign green bonds from countries such as Portugal, Ireland and Italy.
France this year became the second sovereign after Poland to sell so-called "green bonds", where the proceeds are used to finance projects to address climate change.
Financial News, Green bond standards tighten – but is it enough?, Mark Cobley and Tim Burke
An industry discussion stirred by the changes recently introduced to the Green Bond Principles by The International Capital Markets Association. Are they going far enough?
Sean Kidney, the chief executive of the Climate Bonds Initiative, backed the use of testable performance indicators but only in "some sectors". He pointed to the contrast between an energy firm raising money to finance solar panels instead of building a coal plant - where a reduction in carbon emissions can be taken as read - and a company financing energy-efficiency improvements to buildings.
Investments & Pensions Europe, ESG round-up: Industry green bond standards updated, Susanna Rust
Revision to Green Bond Principles also covered by I&PE.
According to a statement from ICMA, the changes to the principles included updated “project and traceability language” to facilitate more issuance, especially from sovereigns and corporates, and stronger guidance on issuer communication of environmental strategy and management of material environmental and social risk factors.
The Guardian, Making the planet great again: Nigeria’s role in the Green Agenda, Daniel Akinmade Emejulu
Is Nigerian green bond going to be the first sovereign green bond issued by an African nation?
About N12billion will help to fund the replanting of forests that support local livelihoods; solar power installations in local communities; and off-grid power plants for schools and hospitals.
FT Adviser, Green bond investors demand transparency, Simoney Kyriakou
Author voices demands of the investors for more transparency and assurance in the green bonds market.
Although the principles require green bond issuers to report annually on the projects they fund, there are no requirements to stipulate in quantitative terms the actual impact on the environment.
Bloomberg, The $123 Billion Question Hanging Over Renewable Energy, Katie Linsell
Read to find out what bodies already scrutinize green bonds issued around the world.
At the end of last year, about 80 percent of issuers were committed to reporting on the use of bond proceeds and the environmental impact, or to undergo external review, up from about 70 percent in the first quarter of 2015, according to Bloomberg New Energy Finance.
Reuters, Public sector investors favor real estate, renewables - survey
The investor survey conducted by The Official Monetary and Financial Institutions Forum shows growing interest of public sector issuers in green bonds.
The survey noted a growing interest in the green economy, with 38 percent planning to buy more green bonds, and 35 percent wanting to boost their exposure to renewables
Corporate Knights, Sizing up the market, Sean Kidney, Toby A.A. Heaps
Sean Kidney and Toby A.A. Heaps on ways Canada can harness the potential of green bonds to fund ambitious infrastructure plans.
Issue-guide-grant. It’s a formula for federal action on green bonds that could set the stage for increased funding for our infrastructure needs, for meaningful reductions in climate emissions and for Canadian leadership in the growing global market for sustainable financing expertise.
Forbes, Should You Invest In 'Green Bonds?', Kerry Hannon
Read this article if you are an individual investor interested in adding some green bonds to your portfolio.
Don’t be discouraged, though. There are ways small investors can buy green bonds — through ETFs and mutual funds that purchase them. Just don’t count on enormous yields right now.
Tidal Energy Today, Marine bonds draft criteria up for public review
Marine Renewable Energy Criteria for marine related-investments under the Climate Bonds Standard are up for public review. Tidal Energy reports.
Once completed and released, the criteria can be used by green bond issuers who are seeking Climate Bonds Certification, which is a tool to assist investors and issuers in prioritizing investments that contribute to addressing climate change, according to World Ocean Council (WOC).
And some foreign language coverage….
La Tribune, Paris se voit en "capitale mondiale de la finance verte”
Le marché des green bonds a explosé l'an dernier, atteignant 81 milliards de dollars, fin 2016. Cette année, on dépasse les 49 milliards d'après Climate Bonds Initiative.
Boursorama, Vers une maturité du marché des Green Bonds?
Toutefois, « si l’harmonisation est désirable et envisageable, une uniformisation totale est inatteignable » estime Anna Creed, en charge de la définition des critères de la Climate Bonds Initiative. Cette réserve tient au rôle clé des organismes de contrôle et d’évaluation.
Börsen-Zeitung, Lückenhafte Berichte zu Green Bonds
Die Berichterstattung über die Mittelverwendung von Green Bonds lässt zu wünschen übrig. Zu diesem Ergebnis kommt eine jetzt vorgelegte Studie der Climate Bonds Initiative (…)
Institutional Money, Neue weltweite Studie zur Mittelverwendung von Green Bonds
Herausgeber der Studie „Use of Proceeds“ ist die Climate Bonds Initiative, ein weltweiter Zusammenschluss verschiedener Unternehmen und Organisationen mit dem Ziel, den Markt für Green Bonds zu fördern. BlackRock ünterstützte die Studie ebenso wie die Berlin Hyp und die Luxembourg Green Exchange.
ASIA
Reuters, China c.bank plans fresh incentives to support green financing, Kevin Yao
Good news for the Chinese green bonds market.
The People's Bank of China is studying plans to add banks' qualified green credit into collateral for monetary policy operations and to include institutions' green credit performance in the central bank's macro-prudential assessment (MPA), Chen Yulu told a news conference.
Finance Asia, Green Bonds still strong despite US move, Ray Chan
US withdrawal from the Paris agreement won’t hurt the green bonds market says Ray Chan.
The withdrawal of the world’s biggest economy from the Paris climate accord is a blow to those fighting climate change. But China’s growing awareness of the problem means Asia’s green bonds market has plenty of room to grow.
Nikkei Asian Review, China leads in green bonds, but money may be going elsewhere, Joyce Ho
‘Loose standards’ for issuing green finance products in China questioned by Nikkei.
Of the $2.47 billion in green bonds issued by China in the first quarter of this year, however, nearly 61% failed to meet the international definition of such instruments, according to Climate Bonds Initiative, a London-based organization that promotes the market that emerged only a decade ago.
Renewables Now, China’s green bond market is more orderly than you might think
Renewables Now republishes our article, in which we explain why Climate Bonds Initiative sees China as a leader of global efforts in harmonizing green standards.
The need for progress on standardisation and harmonisation, the fundamental importance of international market integrity is generally accepted by all stakeholders. The move towards these objectives in the worlds’ biggest and fastest growing green bond market should also be acknowledged.
Infrastructure Investor, China’s green bond regulation ‘most rigorous in the world’
The boss of the Climate Bonds Initiative thinks concerns over the country’s green bond standards and verification procedures are exaggerated.
Brink News, China Takes Global Green Bonds Market by Storm
Summary of our „China Green Bond Market 2016” report.
According to the report, China’s experience demonstrates that policy tools are essential for the growth of green finance. That said, it still needs to push for a harmonization of standards to facilitate the entry of even more capital into green finance.
Breaking Views, Green Silk Road, Lisa Jucca
The new Silk Road might be co-financed by green bonds issued by the Beijing’s development bank, the Asia Infrastructure and Investment Bank (AIIB).
Road projects such as railways and water routes could be eligible for sustainable financing if they were used, for instance, to replace carbon-intensive motorways. If the triple-A rated AIIB were to issue green bonds to fund such projects, it would entice investors.
APPLE GREEN BOND
$1 bn blockbuster green bond by Apple attracted a lot of media coverage.
Financial Times, Apple raises $1bn through ‘green bond’ in environmental push
Apple has raised $1bn in debt in a “green bond” to fund environmentally focused initiatives, weeks after the company’s chief executive criticised President Donald Trump’s decision to pull out of the Paris climate pact.
Reuters, Apple issues $1 billion green bond after Trump's Paris climate exit
The offering comes over a year after Apple issued its first green bond of $1.5 billion - the largest issued by a U.S. corporation - as a response to the 2015 Paris agreement.
Bloomberg, Apple Issues a Second Green Bond to Finance Clean Energy, Alex Webb
Apple said it plans to use the proceeds to finance projects involving renewable energy resources and energy efficiency, among other things.
International Business Times, Apple issues mammoth 'green' bond offer to finance environmental causes, Gaurav Sharma
Apple also said it would step up its efforts towards making its supply chain more sustainable, and double up its drive to use recycled material, thereby reducing its need to mine rare earth minerals.
Yahoo News, Apple is investing $1 billion in clean energy with this unique approach, Maria Gallucci
Apple's latest bond offering also includes a focus on advancing Apple's goal of a closed-loop supply chain, where products are made using only renewable resources or recycled materials to avoid having to mine for new materials.
Nasdaq, Apple Green bond gets US$3.5bn order book
Tech giant Apple notched up a US$3.5bn book for its new US$1bn 10-year Green bond on Tuesday which priced with no new issue premium.
PV Magazine, Apple takes another bite out of Climate Change with 2nd billion-dollar green bond, Ian Clover
Technology giant Apple has served up the perfect riposte to U.S. President Donald Trump’s disavowal of the Paris Agreement by issuing $1 billion of green bonds with the explicit instruction that proceeds raised be steered towards clean energy and eco-friendly projects.
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Certification under the Climate Bond Standard only reflects the climate attributes of the use of proceeds of a designated debt instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national or international laws.
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