Global figure gets over the magic $100bn mark with China Development Bank Certified Bond
What’s it all about?
Six weeks after breaching the 2016 green bond issuance level, there’s already another global record to celebrate!
The latest Climate Bonds Initiative analysis shows green bond issuance in 2017 passing the significant USD100bn benchmark.
Issuance will reach USD101.4bn via the China Development Bank with a USD1.5bn+ green bond due to settle tomorrow (16th November).
This bond will take the Climate Bonds figure on labelled green issuance from today’s USD99.79bn total to well over the USD100bn.
Crucial recent announcements include the Industrial and Commercial Bank of China (ICBC) issuing their inaugural green bond, followed by the China Development Bank’s issuance on November 10th. The moves send a strong signal to other global banks to step up their green bond commitments.
Both the ICBC and CDB bonds have been Climate Bonds Certified, a positive indicator that China’s largest banks are pursuing global best practice in labelled green bond issuance. More certified bonds are in the pipeline.
France, Fiji and soon Nigeria as Sovereigns in 2017
During 2017, France became the second nation to issue a sovereign green bond and Fiji has become the first Pacific Island nation and emerging economy to issue a sovereign green bond.
Nigeria is expected to become the first African nation for sovereign green bond issuance in coming weeks.
Breaking down the numbers
China is leading the Top 10 national green bond issuance for 2017 to date, followed by France, the United States, Germany, Netherlands, Sweden, Mexico, Spain, India and Canada.
European nations have maintained their representation in the top 10, with emerging economies of Mexico and India prominent, reflecting the growth in their green finance markets.
Who’s saying what?
Christiana Figueres, former UN Climate Chief, Convenor of Mission 2020
“Passing $100bn in green bond issuance shows we are moving capital flows in the right direction. The priority is to accelerate green finance and climate investment between now and 2020 at a scale never seen before.”
“A systemic response from global finance is required. Asset owners and managers need to adjust their capital allocations. Banks and corporates need to commence large scale green bond programs. Funding clean energy and green infrastructure to meet NDC goals is the objective. $1 trillion in green finance by 2020 is the performance measure.”
Nick Robins, Co-Director, UNEP Inquiry
"Green bonds are at the forefront of the wider shift to a sustainable financial system. Achieving the symbolic US$100bn milestone is a tangible sign that investors are willing to allocate capital at scale for climate action.”
“We now need to expand the asset pipeline of assets by working with banks on greening their core lending books and bringing in the policy frameworks that can enable the market to grow with integrity.”
The Big Issuers
Major green bond issuers in the leading nations include China (China Development Bank, Bank of Beijing and ICBC), France (Republic of France, Engie & SNCF), United States (New York MTA, Fannie Mae and Apple INC).
Table 1: Top 10 Nations Green Bond Issuance 2017 YTD
*Correction: please see below.
How we got here
We estimate a final figure for 2017 of up to USD130bn in green bond issuance.
The Last Word
We had identified the USD1tn by 2020 objective in our Green Finance Briefing Paper prepared in October 2016 for COP22 Marrakesh.
In April 2017 M2020 convenor Christiana Figueres and other climate leaders called for tenfold increase in green bond investment from 2016 levels and setting a green finance milestone for 2020 of USD1 trillion as one of the actions.
The call was repeated in Nature Magazine in June and subsequently included as a forward goal in our Bonds and Climate Change State of the Market 2017 report.
$100bn in November 2017 means we’ve another three years and one month to go.
If investors and issuers act and governments respond, the 2020 milestone will be well within our reach.
We’ll leave the final comment on reaching today’s benchmark to our CEO Sean Kidney:
“Issuers, sovereigns, sub sovereigns, banks and corporations should respond positively to the many investor calls since COP21 in Paris for quality, investable green product, and enter the market.
We are looking for other nations to follow the lead of Poland, France, and Fiji on the sovereign issuance path. Nigeria is set to issue Africa’s first sovereign green bond.
Now is the time for G20 and OECD countries to act and signal their intentions into 2018."
“Our forecast of $130 billion in green bonds for 2017 is coming closer, but there’s a long way to go to reach the 2020 green finance milestone.”
'Till next time,
*Correction: An earlier version of this communication had an error in the Top 3 German issuers in Table 1 and subsequently the final figure for Germany. This has now beed rectified. The error did not affect the relative national rankings. Our apologies.
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