Early Christmas present for green bonds enthusiasts! 2-month public consultation: Feedback by February 18th, Official release in late 2018
What's it all about?
Comment is sought from green bond issuers, investors, verifiers and other stakeholders.
A good read to keep green bonds enthusiasts engaged during the holiday period, and a motivation to start the New Year with some climate finance action.
What is the Climate Bonds Standard?
The Standard is an overarching multi-sector screening tool that allows investors and intermediaries to easily assess the environmental integrity of bonds claiming to be green and funding the low carbon and climate resilient future.
The Climate Bonds Standard provides clear, sector-specific eligibility criteria for assets and projects that can be used for green bond issuance.
If criteria requirements are met, the bond can be Certified by the Climate Bonds Standard Board attesting the alignment of the bond to a 2 degrees scenario and zero emission trajectory.
How did we get here?
Standard 2.0 was released in December 2015, providing investors in the aftermath of the Paris COP21 Conference with improved guidance for climate and green based investment.
Standard 2.1, released in January 2017, incorporated a range of process improvements including an expansion of the range of debt instruments that could be Certified under the Standard and the inclusion of a Programmatic Certification option that streamlined the verification process for regular issuers with large portfolios of eligible assets.
A quick scan through our last three 2017 Quarterly Newsletters shows that the Programmatic Certification option has become immediately popular among large multiple green issuers including global banks, transport operators and energy companies.
What’s new in the V3.0?
Standard V3.0 has been based on feedback from green finance markets stakeholders, similar to the processes used to develop previous versions (V1, V2.0, and V2.1).
The V3.0 also builds on the collaboration with the Green Bond Principles (GBP) to reinforce a framework with global and wide applicability, and reinforcing similarities in structure and terminology.
The structural changes clarify the alignment with the 2017 GBP structure, including smaller changes to the actual requirements of the Standard regarding characteristics of green bonds and assets, to establish international consistency in the green label.
What does it mean?
- Increased requirements for disclosure, in line with GBP 2017.
- More clarity on reporting requirements, before and after issuance of the bond.
- Further flexibility for issuers with staged allocation of proceeds.
In addition, V3.0 has a clearer definitional approach to the core elements of the Climate Bonds Standard:
- Pre-issuance requirements,
- Post-issuance requirements,
- Green definitions, and
- Certification process.
More to come in 2018
In the past months, we have seen the Standard expand its criteria to Marine Renewable Energy, opened Phase 2 of the Water Criteria for public consultation in October (until January 13th) and launched the England and Wales regional certification criteria for Low Carbon Buildings, the first of a series to be released in the coming months.
There will be a slew of Criteria development announcements during the first quarter of 2018 as Climate Bonds expands the sectors eligible for Certification.
The final V3.0 document, will be launched on the eve of in London in late 2018.
There is a lot to come next year, but meantime...
- Climate Bonds
P.S: Haven’t grabbed an ‘Early Bird’ registration for the big March Conference?
If you’ve got this far in a Xmas Blog about Standards, you’re definitely a green bond enthusiast. Check the agenda and register now.
Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.
The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt instrument or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.
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.
A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.