TOP THREE READS IN FEBRUARY
Alt Energy Stocks, Green swan, Black swan: No matter as long as it reduces stranded spending, Prashant Vaze
Climate Bonds Head of Policy and Government reviews proposals put forward in the document published under the aegis of BiS titled “The green swan - Central banking and financial stability in the age of climate change”. He partly disagrees with the authors that, in his opinion, “blow hot and cold” about central banks climate-related interventions. Prashant thinks these are necessary in the face of the fact that governments tent to act not in anticipation of problems but in reaction to them. Article was originally published on Climate Bonds’ blog.
Critics like Climate Bonds are not arguing for central banks substituting for finance ministers, but for joint action. The central challenge for climate finance is not ensuring the financial stability of banks, but ensuring they redeploy scarce resources from brown assets formation to green and allowing the orderly winding down of losses from stranded assets.
Bloomberg, A dirty cousin of green bonds starts to attract money and skepticism, Alice Gledhill
Transition bonds divide market observers into those that think “there is room for both”: green bonds and transition bonds and those that remain convinced that growth of transition bonds will sabotage GB market integrity.
The risk is that the bonds’ somewhat fuzzy criteria may allow companies to get funds for projects with few environmental benefits - exactly the sort of thing that planned European Union guidelines are designed to prevent in the $600 billion-plus green-bond market.
Global Capital, Sustainability: more stick, less carrot, Jon Hay
Jon Hay, exploring impact of EU taxonomy, says sustainable finance is a unique sphere of business that voluntarily begs for regulation - in contrast to other financial markets players that yearn for less rules.
Although this broad basket of activities has grown very rapidly without the aid of regulation, even leaders in the field appear bewildered. Like successful commanders who have captured an outpost more by luck than judgement, they admit that they do not know which way to turn next, and desperately want a map. Hence the near-unanimous support in financial circles for the EU’s Sustainable Finance Action Plan, launched in 2018, and its centrepiece, the Taxonomy of Sustainable Economic Activities.
MARKET NEWS & ANALYSIS
Financial Times, North America and Asia fail to keep pace in green bond boom, Billy Nauman
Quoting CBI’s data, author says that American companies continue to lag behind when it comes to green bonds issuance. He also highlights a drop in issuance from China.
Last year’s $1bn green bond from Verizon might encourage other US companies to tap into the market, Moody’s said. But it is now a full year since that Verizon bond came to market, and no such rush has materialised yet.
AFP, As nations bicker, a greener future evolves in finance
The piece republished in several outlets around the world quotes Sean Kidney saying that the transition to a low-carbon economy would generate $90 trillion investment in areas including low-energy cooling, urban farming and greener transport.
Hard-nosed US investors in fields such as solar panels are not necessarily driven by anxiety about global warming, Climate Bonds Initiative chief executive Sean Kidney said. "Most of them are Republicans for god's sake," he said at a conference on climate finance organised by the European Bank of Reconstruction and Development (EBRD) in London.
Salaam Gateway, Why so few green sukuk? Sector still faces longstanding challenges, say practitioners, Hassan Jivraj
Autor identifies challenges that impede growth of green sukuk globally.
Globally, green bond, green loan and green sukuk issuance reached $257.7 billion in 2019, up by 51% on 2018, according to the Climate Bonds Initiative. $10 billion, equivalent to around 4%, are green loans. However, the CBI notes that of the total green issuance, sukuk accounted for only $3.1 billion in 2019.
Petroleum Economist, Gas a bridge to nowhere, Beatrice Bedeschi
Sean Kidney thinks that positioning gas as a transition fuel is a “dead end, not a bridge” to the low carbon future.
While thus far gas has featured in governments’ energy strategies and regulator’s plans as a critical step on the transition, “the science says that has proven not to be right,” Kidney contends. “That is mainly because emissions have gone up so fast in the past 10 years, instead of down, partly because the world is getting hotter,” with the latter pushing up demand for often fossil fuel-fired air conditioning.
ETF Trends, Red Hot Year for Green Bonds, William Sokol
Author suggests thet 2020 will be a hot year for green bonds and looks at findings of Climate Bonds’s 2019 issuance analysis.
Signs currently point to a record year for green bond issuance in 2020, after another record year in 2019. Over the course of 2019, $255 billion of bonds were issued that were aligned with the Climate Bonds Initiative’s green bond taxonomy, a 49% increase over 2018.
The Asset, The Asset Talk: How urgent is it to develop sustainable businesses?
Cedric Rimaud, ASEAN programme manager at Climate Bonds Initiative speaks about the need for all businesses to transform the way they do business.
“If we only rely on the new businesses that are emerging, renewable energy for example or other types of green businesses, it won’t be enough to alleviate all the emissions that are caused by the rest of the economy (…)”
Environmental Finance, Green Buildings and Green Bonds
Article looks in-depth at Berlin Hyp’s Green Pfandbrief and Climate Bonds Standard’s low carbon building criteria.
The reference to the top 15 per cent is also a key aspect for the CBI. Its low carbon building criteria only accepts those 15 percent with the lowest carbon intensities in a regional market. City-baselines developed by the CBI are trajectories that also include the term of a green bond
(re-)financing green buildings.
Environmental Finance, Bringing Transparency to Green Bonds in Latin America and the Caribbean
Threefold increase in the green bonds issuance in Latin America and the Caribbean is good news for the region.
This growth has come from a low base, with new issuance rising to $6.13 billion in 2019, compared with $2 billion in 2018, according to figures from the Climate Bonds Initiative (CBI).
The Asset, China champions green bonds, Amy Kam
Author who is an Asian investor looks at Chinese green finance journey.
Furthermore, the proportion of China-issued green bonds that do not explicitly adhere to internationally accepted standards has decreased – down to 26% from 38% in 2017. This figure lends credence to China’s shift towards transparency and alignment, as the majority of Chinese issuers produce public reports in line with the People’s Bank of China’s requirements.
The Africa Report, Climate change is here: time to use all the whole financial toolkit, Evans Osano
Author lists some positive steps that have been taken globally and locally in Africa to shift finance to green investment, but says more has to be done to ensure that “opportunities are not being missed”.
A good example of this is the work undertaken by the Climate Bonds Initiative and FSD Africa in Nigeria last year, where the two organizations delivered training to the Securities Exchange Commission and the National Pensions Commission.
CNBC, The numbers suggest the green investing ‘mega trend’ is here to stay, Elliot Smith
Green “mega trend” does not mean only bonds but also equities, ETF’s and hedge funds.
2019 saw a total of 479 green bonds issued worldwide, up by a quarter compared to the previous year, and 2020 is set to be a “bumper” year for green bonds, driven by a new set of standards in Europe and an uptick of activity across Asia, according to Linklaters.
Responsible Investor, ESG Briefing, February 25th: Bonds & Loans
Responsible Investors highlights the ongoing public consultation for the proposed Agriculture Criteria under the Climate Bonds Standard.
Taxonomy
Forbes, Can The EU’s Green Taxonomy Wipe Out Greenwashing?, David Carlin
Author of the article explains how the EU taxonomy will work “on the ground”.
Financial firms will use the taxonomy to assess company and product exposures. The evaluation follows a five-step process. First, financial institutions will identify the relevant activities that correspond to activities listed in the EU taxonomy.
Eco-Business, Why the European Union’s green taxonomy is risky business, Stan Dupré
Author, member of the High-Level Expert Group (HLEG) on Sustainable Finance that designed the taxonomy, criticises its final version for not prioritising activities that face financing gap.
After all, from an environmental perspective, the sole purpose of reorienting financial flows toward such activities is to bridge a funding shortfall. And not all sustainable activities listed in the proposed taxonomy are necessarily underfinanced.
Moody’s 2020 predictions: $300 billion
Reuters, Global green bond issuance seen at $300-$375 billion this year-research, Nina Chestney
Moody’s Investor Service expects green bond issuance to 
reach $300 billion in 2020, while social and sustainability bond issuance will reach $25 billion and $75 billion respectively.
Pensions & Investments, Green bonds grow all around, Charles McGrath
Moody's expects 2020 issuance to be about $400 billion, a 24% increase over 2019. GSS bond issuances rose 60% between 2018 and 2019.
Expansión, Moody's: la emisión de bonos verdes y sociales subirá un 24% en 2020
Según un informe de la agencia de calificación Moody's remitido este lunes, el mercado de bonos verdes seguirá creciendo en consonancia con los años anteriores.
El Economista, Moody’s proyecta récord mundial en bonos sostenibles
Es viable que se logre un monto de colocación de US400,000 millones contra US323,000 millones del 2019, dice la calificadora de deuda.
Business Green, Moody's predicts green bond market boost, Catherine Early
Green, social, and sustainability bond issuances could be set to jump 24 per cent to a record $400bn in 2020, according to a forecast from credit ratings giant Moody's.
Ecofin, Moody’s sees 24% increase in green bond issuance in 2020
Of the $400 billion, green bonds are seen at $300 billion while social and sustainability bonds are expected at $25 billion and $75 billion, respectively.
Renewables Now, Green bond issuance seen at USD 300bn in 2020 - Moody's
Jornal Económico, Emissão de obrigações sustentáveis deverá atingir novo máximo de 400 mil milhões de dólares este ano
L’agence Ecofin, Finance climat : Moody’s prédit 400 milliards $ d’émissions d’obligations durables pour 2020
ETicaNews, Green bond & Co, le stime di Moody’s e il dibattito sulle nuove label
S&P 2020 predictions: $400 billion
International Financing Review, Global sustainable debt issuance to hit US$400bn in 2020: S&P
S&P expects global issuance of sustainable debt, including green bonds, to balloon to over US$400bn this year, up from over US$350bn in 2019, amid further innovations and growth for the asset class.
Markets Media, Sustainable Debt Issuance To Surpass $400bn in 2020, Shanny Basar
Noemie de la Gorce, S&P Global Ratings credit analyst, said in a report: “While it still represents a minor part of global issuance, this share is increasing — to about 3.5% from less than 1% five years ago. (…)”
RSEDataNews, Finance durable : des financements d'entreprise tirés par les crédits à impact et les 'sustainable bonds'
Dans une étude publiée ce jour, S&P Global Ratings tire le bilan des émissions d'instruments de financement durables ces dernières années.
COVERAGE IN FOREIGN LANGUAGES
In French
Le Devoir, Le prix vers le vert, Diane Bérard
Author says that Repsol green bond “episode” highlighted the need to create a financial instrument that will reflect decarbonisation efforts of brown industries without compromising the credibility of green bonds.
En 2017, Repsol, géant espagnol du secteur pétrolier, émet des obligations vertes pour un montant de 563,2 millions de dollars américains. (…) Vigeo Eiris, une agence internationale de notation ESG (environnement, social, gouvernance), lui donne raison. Mais l’influente Climat Bond Initiative — une ONG internationale qui offre une certification aux émetteurs d’obligations vertes — refuse cette étiquette.
La Presse, Pendant que les États piétinent, la finance verte avance
Author summarises financial community talks that took place at the EBRD “Climate corporate governance for financial institutions” event in London.
M. Kidney, dont l'organisation certifie des obligations vertes émises par les pouvoirs publics ou les entreprises, estime que la transition vers un avenir à faible émission carbone générera 90.000 milliards d'investissements d'ici 2050 dans des domaines comme le chauffage ou les transports.
Boursenews, Les emissions mondiales de green bonds ont atteint 257,7 milliards de dollars en 2019
Moroccan edition of Boursenews looks at findings of CBI’s “2019 Green Bond Market Summary”.
In Dutch
Elsevier Weekblad, Olie en gas: de dino’s van de energiewereld?, Marijn Jongsma
Author looks at uncertain future for oil, gas and coal investors.
Wat gaat er gebeuren met de gas- en oliemaatschappijen? Bond ziet grote risico’s als deze giganten in nieuwe velden gaan investeren ‘aan het einde van het fossiele tijdperk’. Sean Kidney van het Climate Bonds Initiative, dat de uitgifte van groene obligaties promoot, vindt de klimaatuitdaging dermate groot dat het doek voor gas zonder CO2-opslag de facto al is gevallen.
IEX Profs, Wie nog belegt in fossiele energie is gek, Rob Stallinga
Author summarises talks that took place at the State Street Global Advisors Climate Change Seminar in Amsterdam and bluntly concludes that those still investing in fossil fuels have gone “crazy”.
Dat wil niet zeggen dat Kidney pessimistisch is over de toekomst van de mensheid, integendeel. "We weten wat we moeten doen om de uitstoot van broeikassen te verminderen. De technologie is er." Enthousiast is hij bijvoorbeeld over de Chinese regering die binnen afzienbare tijd alleen nog maar elektrische auto's in de straten wil zien. "Over een paar koopt iedereen elektrische auto's omdat ze gewoon goedkoper zijn."
In German
Cash Online, ETF: Vorzüge passiver Investments in Green Bonds, Heike Fürpaß-Peter
Author argues that green bonds are the most standardised segment in the sustainable investment market.
Manchmal werden auch andere Regelwerke herangezogen wie die der Climate Bonds Initiative (CBI), eine anlegerzentrierte gemeinnützige Organisation. Diese legt den Fokus darauf, Fremdkapitalmärkte für Anlagelösungen zur Bekämpfung des Klimawandels zu mobilisieren.
In Spanish
Cinco Dias, Las empresas se financian ya más barato con bonos verdes que con los convencionales, Nuria
Author quotes Goldman Sachs research that shows - based on example of three recent issues - that green issuance is getting cheaper than traditional one.
La eléctrica alemana Eon acudió al mercado el pasado 9 de enero con una emisión de tres tramos, en la que el tramo verde registró la mayor sobresuscripción, de 2,3 veces, frente a las 2 veces de los otros dos tramos. Y esa mayor demanda permitió una prima de emisión –sobre el bono comparable en el mercado secundario– negativa de 2 puntos básicos.
In Italian
ICT Business, La finanza “green” prende piede, impariamo a conoscerla
Introduction to sustainable investing in Italian.
La finanza “green” è il futuro. O meglio, investire su aziende e prodotti finanziari sostenibili sembra essere una tendenza destinata a crescere e a integrarsi nei processi e nei prodotti di investimento di altro tipo. Così suggeriscono i dati di agenzie di rating, banche e associazioni come la Climate Bond Initiative.
In Turkish
Dunya, Yeşil tahvil ihracı 2019’da 255 milyar dolarla rekor kırdı, Didem Eryar Ünlü
Findings of Climate Bonds’ 2019 report also in Turkish media.
Yeşil tahvil piyasalarını inceleyen Climate Bonds Initiative (CBI) tarafından yapılan araştırmaya göre, 2019 yılında küresel yeşil tahvil ve borç ihracı yüzde 50 oranında artış göstererek 255 milyar dolara ulaştı.
SOVEREIGN GREEN BOND GOSSIP
Latin America
Bloomberg, Green Bonds are selling like ‘ice cream’ – Latin America wants in, Ezra Fieser
Analysing market prospects for Latin America, Sean Kidney told Bloomberg that selling green bond is a bit like “selling an ice cream on a hot day”and revealed that several LatAM countries are working on sovereign issuance.
The governments of Mexico, Peru, Colombia, Costa Rica and the Dominican Republic are either planning sales or working to establish the framework to issue this year, according to Sean Kidney, the chief executive officer of Climate Bonds Initiative, a London-based non-profit that promotes the use of the debt.
Diario Gestión, Bonos verdes de América Latina alcanzarían nivel récord en el 2020
Kidney’s predictions for LatAM also in Peruvian business paper…
Los gobiernos de México, Perú, Colombia, Costa Rica y República Dominicana están planeando ventas o trabajando para establecer el marco para emitir este año, según Sean Kidney, director ejecutivo de Climate Bonds Initiative.
…and many other outlets:
Expansión, Los bonos verdes se venden como 'helado' y Latinoamérica no se lo quiere perder
Yahoo Finanzas, Bonos verdes se venden como ‘helado’. Latinoamérica desea entrar
Pauta, Chile abre la ruta verde de las finanzas en América Latina: otros países buscan imitarlo
MarcoPress, Five Latin American countries planning to issue green bond
Finance & Commerce, Latin America wants in on green bonds
Yahoo Finanzas, Bonos verdes se venden como ‘helado’. Latinoamérica desea entrar
Mexico
Bloomberg, Mexico’s Green Sovereign Bonds to Be Welcomed by Investors, Justin Villamil, Sydney Maki
Mexico’s debut in the green bond market may be well-received by investors hungry for environmentally and socially conscious debt.
Expansión, Los bonos verdes de México serán bien recibidos por los inversionistas
Después de que Chile vendiera bonos verdes a largo plazo denominados en dólares y en euros que pagaron un rendimiento récord el mes pasado, México mantendrá reuniones con inversionistas para estrenar su Marco de Bonos Soberanos para los Objetivos de Desarrollo Sostenible (ODS), que se utilizaría para emitir deuda verde denominada en euros.
El Semanario, Bonos verdes y sus retos en México
“Vemos claramente que hay una gran demanda de este tipo de activos y actualmente el gobierno está laborando en ello, está trabajando en el marco de las condiciones para para que esto suceda”, declaró a inversionistas José de Luna, director de Crédito Público.
Colombia
Portafolio, Colombia emitirá bonos verdes desde el próximo año
Y uno de los que está en ese grupo es Colombia, país que se encuentra inmerso en la estructuración de estos títulos de deuda pública para salir al mercado a hacer colocaciones a partir del próximo año, aunque todavía no hay establecida una fecha formal.
Egypt
Egypt Today, Egypt to issue intergovernmental green bonds
Egypt’s Ministry of Finance started its procedures to issue intergovernmental green bonds, to be the first country in the Middle East and North Africa issues such “climate bonds.”
Zawya, Egypt hires four international banks for first green bonds
The North African country seeks to diversify financial resources and attract more investors to the Egyptian market, along with the reduction of the cost of finance of government securities.
Spain
El Economista, España se prepara a emitir su primer bono verde
El Tesoro español anunció que hacia la seguinda mitad de este año el gobierno emitiría deuda ecológica para ayudar a combatir el cambio climático.
Austria
Institutional Money, Erster Austro-Green-Bond noch dieses Jahr möglich
Die Oesterreichische Bundesfinanzierungsagentur (OeBFA) bereitet sich auf die Ausgabe des ersten "Green Bond" für Österreich vor. Möglich sei der Herbst diesen Jahres, wird Alfred Lejsek, Leiter der Gruppe "Finanzmärkte" im Finanzministerium im Rahmen eines "Sustainable Finance Summit" von der Nachrichtenagentur Bloomberg unter Verweis auf die APA zitiert.
CLIMATE BOND STANDARD CERTIFIED BONDS
Tohoku Electric Power
Bloomberg, Shift to Cleaner Power Sparks Landmark Green Bond in Japan, Ayai Tomisawa, Rie Morita
The utility recently got certification from the Climate Bonds Initiative, an international nonprofit organization that created the first green bond standard in 2010. Tohoku Electric Power officials said in an interview at the company’s headquarters in Sendai that it did so to try to attract overseas investors.
Japan Times, Shift to cleaner power sparks landmark green bond sale in Japan, Ayai Tomisawa, Rie Morita
Tohoku Electric Power Co. plans to price what would be the debut green note from a utility with its ¥5 billion offering of 10-year securities Thursday.
Safety4Sea, Tohoku Electric Power to boost offshore wind projects
Moreover, the utility recently received a certification from the non-profit organization, Climate Bonds Initiative, the first one to create green-bond standard back in 2010.
Quartz newsletter, Central banks, Android 11, edible art
Meanwhile, Tohoku Electric Power Co. is set to sell the first “green bond” from a Japanese utility.
Industry Global News 24, Japan commences green bond sale after clean energy boost
La Société du Grand Paris
Le Journal du Grand Paris, La SGP émet une obligation verte de 2,5 milliards d’euros à échéance 2070
La Société du Grand Paris a émis, le 11 février 2020, sa quatrième obligation verte, d’un montant record de 2,5 milliards d’euros et dont l'échéance est fixée au 18 février 2070.
Business Immo, La Société du Grand Paris émet sa 4ᵉ émission verte d’un montant de 2,5 Mds€
La Société du Grand Paris a émis sa quatrième obligation verte de référence de son programme « Green Euro Medium Term note » (…).
L’Agefi, La Société du Grand Paris bat son propre record dans les green bonds
CFNews, La Société du Grand Paris place à 50 ans, un record
Goldman Sachs Renewable Power
Goldman Sachs Renewable Power LLC (…), announced today that a wholly-owned subsidiary of GSRP (the "Issuer") has priced and closed a private placement offering (…) of $500 million aggregate principal amount of Senior Secured Notes due 2044 (the “Notes”). The Notes are green bonds certified under the Climate Bonds Standard.
Santander Consumer Bank
Global Capital, SCB Norway offers ‘real rarity’ in euro market, Tyler Davies
Santander Consumer Bank AS was well supported for a rare offering of preferred senior debt at the beginning of the week, as market participants suggested that spreads on Norwegian bank bonds could have room to tighten further.
Global Capital, Trio gets strong reception in senior, David Freitas
On Monday, investors had the rare chance to put money into Santander Consumer Bank AS, the Norwegian arm of Spanish lender Banco Santander.
economiadehoy.es, ING asesora a Santander Consumer Bank Nordic AS en su primera emisión de bonos verdes
