Scaling Finance for Sub-national and Corporate Climate Action through Green Bonds
What’s it all about?
Last Thursday in San Francisco, during the Global Climate Action Summit (GCAS), World Bank VP for Sustainable Development, Laura Tuck, announced the formation of the Global Green Bond Partnership (GGBP).
The GBBP Founding Members are:
- World Bank,
- International Finance Corporation (IFC) – part of the World Bank Group,
- Amundi,
- European Investment Bank (EIB),
- Climate Bonds Initiative,
- Ceres,
- ICLEI – Local Governments for Sustainability,
- Global Covenant of Mayors for Climate and Energy (GCoM),
- and lastly, the Low Emissions Development Strategies Global Partnership (LEDS GP) who have been instrumental in the formation of the new group.
What will the GGBP do?
The basic role of the GGBP is to support efforts of sub-national entities such as cities, states, countries, corporations and private companies, and financial institutions to accelerate the issuance of green bonds.
The Partnership will scale green bond issuance through targeted technical assistance, capacity building, de-risking, investing, and underwriting support, as well as assisting the development of innovative funds and other financial vehicles to mobilise investor capital.
The partners will also work together on the development of a Green Bonds Readiness Framework/Toolkit that will enable potential issuers to assess their readiness to issue green bonds and identify barriers to issuance, as well as streamline coordination across and among technical assistance and capacity building organisations and efforts.
Support for Green Bond Pledge Signatories
In a major step, GGBP members will also seek to engage with and provide technical assistance to Signatories of the Green Bond Pledge, supporting the development process around inaugural green issuance.
Who’s saying what?
Laura Tuck, Vice-President for Sustainable Development, The World Bank Group:
“The World Bank Group regularly innovates new ways to help cities finance low carbon and climate resilient infrastructure. The Partnership will leverage this know-how while expanding our reach to developing countries and cities eager to use green bonds as a key element of their climate finance strategy.”
Sean Kidney, CEO, Climate Bonds Initiative:
“The brown to green shift in corporate balance sheets and capex directions needs accelerated action from the world’s biggest banks, largest emitters and institutional investors. The global green bond market is now the platform for this large-scale shift, with the target of trillions in new capital mobilised towards climate adaptation and resilience, clean energy and green infrastructure.”
Vikram Widge, Global Head, Climate Finance and Policy, IFC:
“In the past decade green bonds have proven to be a real force in driving commercial financing into climate-smart investments and hold great promise for further scale up. IFC looks forward to participating in the Global Green Bond Partnership and collaborating with other pioneers to accelerate the issuance of green bonds and crowd in additional climate finance."
Stanislas Pottier, Chief Responsible Investment Officer, Amundi:
“Amundi, as a leading green manager and investor in the global clean energy transition, looks forward to working with Global Green Bond Partnership members to identify new opportunities to support the fight against global warming.”
Jonathan Taylor, Vice President for Climate Action, EIB:
“Scaling up green finance is crucial to tackle climate change and implement the Paris Agreement. As the first and largest issuer to date, the EIB recognises the key potential of green bonds to accelerate low carbon investment and enhance investor support.”
“As the EU Bank, we welcome the new Global Green Bond Partnership that will tackle barriers to green bond issuance. Enabling green bonds to be issued for the first time by new public and private partners, including in emerging and developing economies, will allow even more eligible projects to benefit.”
The last word
The UNFCCC estimates that USD1.5trillion of financing needs to be mobilized every year to 2030 to fully implement the Paris Agreement.
Mission2020 has had a milestone since early 2017 of USD1trillion in green finance by end 2020, a goal that Climate Bonds has actively supported.
As climate impacts grow, climate finance is inevitably coming into closer focus to fill the gap between Paris ambition and carbon emissions. The formation of the GGBP is a reflection of this shift and the increasing emphasis on action at a sub-national, city and corporate level.
At sub trillion levels, green investment is yet to reach a scale that makes the brown-to-green transition a reality. One of the many roles for the GGBP will be to help achieve that acceleration.
Read the full Media Release on the Global Climate Action Summit website.
Follow the GGBPartnership on Twitter for further announcements and developments.
‘Till next time,
Climate Bonds
