MARKET
Foreign Policy, Why central banks need to step up on global warming, Adam Tooze
An excellent, insightful analysis of the climate-related social and economic risks, on one side, and ability of the financial system to bear their weight, on the other. Author says that up-to- date response of central banks to climate change is defensive and calls for a more proactive model. Green bonds are important part of Tooze’s insight as he suggests there is “a strong case for funding a large part of this decarbonization drive through the issuance of long-term debt.” Author argues that massive volume of green bonds should be issued by public investment banks or by national governments and that it is the role of central banks to act as a backstop, “a buyer of last resort”.
His article offers also a great insight into the abilities of the insurance sector to act as shock-absorber in case of catastrophic weather events becoming a norm. Tooze lays out two detailed scenarios for decarbonisation: a “shock-free” one, where taxes on carbon are telegraphed far in advance thus giving industry time to adjust. Second one - more likely – is a panic-driven decarbonisation.
Acting as a backstop to the issuance of a massive volume of publicly issued green bonds is certainly a novel role for the central banks. But after their exertions in the 2008 financial crisis, central bankers, of all public officials, can’t plausibly retreat into an insistence on the limits of their mandate. When faced with the prospect of global financial collapse, they engaged in extraordinary measures to stabilize the global banking system and flood the world with liquidity. The climate emergency poses a risk that is even more existential.
Bloomberg Opinion, How Boris Johnson can defend the City of London, Mark Gilbert
Author argues that UK, in the face of the no-deal Brexit, should grasp every opportunity to position itself as a hub for green finance – that opportunity lies, he says, in issuing a sovereign green bond.
Prior to entering Parliament, the newly installed chancellor of the exchequer, Sajid Javid, was a managing director at Deutsche Bank AG. So he, of all politicians, should appreciate that the City needs to grasp any and every opportunity to position itself for a post-Brexit world. Prime Minister Boris Johnson should allow him to instruct the DMO to embrace green bonds as a relatively cheap way to put London in the mix — and the sooner, the better.
Financial Times (Opinion), Clearer metrics are needed to assess green bond authenticity, Joshua Kendall
Author argues that a lot is to be done in the area of green bonds post-issuance reporting. He says the sovereign issuance scores generally better in this area and takes an opportunity to call on the UK government to issue green gilts.
The green bond issued recently by the Netherlands had a clear framework with ambitious commitments on renewable energy, energy efficiency and water management (…) we believe the UK should consider issuing green gilts to fund improvements to energy efficiency, public transport and sources of clean energy, and these initiatives will help to provide clear frameworks for such issuance.
Reuters, Global green bond supply may slow in second half 2019 - BMO, Richard Leong
Article points to an analysis that suggests green bond issuance might – in a short term – experience a slow-down due to stringent nature of the EU Green Bond Standard. However, quoted BMO strategists says that in the long term, the new standard will likely result in significant supply growth by driving certainty in the market.
Green bond supply from around the world in the second half of this year may slow from a record first half, as issuers take time to meet tighter standards on sustainability for activities these bonds are intended to fund, BMO Capital Markets analysts said on Wednesday.
Financial Times, Germany weighs options for debut ‘green bond’ sale
Market anxiously awaits the debut Green Bund from Germany.
According to the Climate Bond Initiative, the region was the source of half of all green debt issued worldwide in the first quarter of the year. Despite the central role of German sovereign bonds in European debt markets, however, green German government debt has so far been notable for its absence.
Investment & Pensions Europe, Mixed pension fund response to Swedish government green bonds plan, Rachel Fixsen
Another European nation announced plans for sovereign green bond issuance.
Sweden’s largest pension fund Alecta has welcomed the government’s plan to issue green bonds for the first time by next year – but others have voiced doubts about the proposed environmentally-linked sovereign debt.
The Japan Times, Japan advised to set own green taxonomy, Yoshiaki Miura
Sean Kidney told Japan Times that because of peculiarity of its various industries, Japan should develop its own taxonomy inspired by the EU’s one.
“For example, agriculture is a complicated area in which Japan should have its own criteria,” Kidney said. According to him, the key is to bring such regional characteristics and differences together to create a global taxonomy that everyone can agree on because climate issues as well as economic and investment are all universal factors.
Euromoney, Calls for transition bonds gain traction, Helen Avery
Author quotes the statement issued by Paris-based AXA Investment Managers calling for development of the transition bond market that will allow carbon-intensive industries gradually shift to low-emission operating.
Diverse investor demand and potentially favourable financing terms in a new asset class of transition bonds may help to encourage the shift in brown companies and industries Takatsuki mentions. A different class of bonds would also have other benefits – chiefly ensuring green bonds remain green and free from greenwashing.
Bloomberg Businessweek, How ‘Transition Bonds’ Can Help Polluters Turn Green, Tom Freke
Transition bonds explained in simple terms.
It makes sense that green bonds are meant for green companies. But there aren’t that many of them -- not enough to meet the rising demand from investors who want their money to have a positive impact on the environment.
Pensions & Investments, Demand for green bonds crimped by lack of supply, Paulina Pielichata
Journalist spoke to multiple asset owners and investment managers. Conclusion from these conversations is that shortage of issuers and high yield issuances are key problems for the GB market. Impact of the EU taxonomy was also discussed.
"One of the problems is greenwashing, which I'm hoping the European Union's taxonomy will help with," says Mikael Bek, head of environmental, social and governance at PenSam (…) "We are considering investing in green bonds," (…) "We need a larger market. The EU taxonomy will help with clarifying the requirements for proceeds. Then we hope the market will increase."
Financial Times, $1bn green bonds to boost sustainable Brazilian farming launched
An interesting $1bn green bonds scheme marked as the "world's first" has been launched at the London Stock Exchange. It is focused on supporting sustainable soy production in underutilized land in Brazil.
SIM [ Sustainable Investment Management] will arrange $1bn in green bonds over the next four years, which is expected to result in 180m tonnes of responsible soy and corn, worth around $43bn in the first decade. The first $300m bond issuance is planned for the planting season of 2020.
Financial Times, New green bond scheme to support sustainable commodities, Shaun Kingsbury
Chairman of the Sustainable Investment Management (SIM) that manages the Brazilian farming programme provides more insight into the green bond scheme launched in London.
We believe this is the world’s first green bonds scheme that finances farmers and producers who commit to using degraded land instead of expanding into existing grasslands. (…) The market is now responding. Green investors can provide not only the financial support but the solution needed to help achieve responsible soy and corn production in Brazil.
Energy Live News, Germany issued €6.6bn of green bonds in 2018, Priyanka Shrestha
Germany is posed to remain in the global top five in terms of green bond issuance in 2019 according to a new report from CBI.
The report suggests 2018 also saw a 20% increase in financial corporate issuance as more banks, including Commerzbank and DZ Bank, entered the market with green programmes financing renewable energy projects.
Renewables Now, Germany issues EUR 6.6bn of green bonds in 2018
Report findings also in Renewables Now.
According to a new report released by the Climate Bonds Initiative, Germany ranked as the fourth largest country in terms of green bond issuance in 2018 when the global total surpassed USD 167.7 billion. The US ranked first with USD 34 billion issued, followed by China with USD 31 billion and France with USD 14 billion.
Salaam Gateway, ’Surge’ in green sukuk issuance in H1 2019 – Climate Bonds Initiative
Islamic finance news portal quotes findings of our report “Green bonds market summary - H1 2019”.
The first half of 2019 saw a “surge” in green sukuk issuance, said the Climate Bonds Initiative in a new study. The increase in activity is thanks to Indonesia’s second sovereign green sukuk and debut deals from Malaysian Pasukhas Group and the UAE’s Majid Al Futtaim (MAF), said the study.
Investing in Regenerative Agriculture (podcast), Sean Kidney, the $100 trillion bond market everyone in regenerative ag and food should know about
40 minutes interview with CEO of Climate Bonds Initiative,
**July coverage of the EU Taxonomy & Green Bond Standard
See more in the June’s media digest
Investment & Pensions Europe, EC’s expert group releases landmark climate taxonomy
The European Commission’s expert group on sustainable finance last month published its long-awaited final recommendations for a taxonomy of environmentally sustainable activities, which is at the heart of the EU executive’s plan to harness the finance sector for its fight against climate change.
Forbes, London Names and Shames In Energy Rejig, Felicia Jackson
The launch of the recommendations of the TCFD and the EU’s Sustainable Taxonomy are expected to help define the boundaries of what impact, green and sustainability investors are looking to back.
Pensions & Investments, EU eyes harmonizing data for low-carbon goal, Paulina Pielichata
To help asset owners and managers meet that goal, the European Commission released results June 18 from an expert working group that set out a detailed taxonomy — a classification system — for evaluating how sustainable a particular corporate activity is for the environment.
Top100funds, A sustainability taxonomy for investors, Brenda Kramer
The taxonomy is best compared to a green encyclopedia for financial market participants. An encyclopedia that provides guidance to investors that are looking to finance the transition to an economy in line with the goals of the Paris Climate Agreement.
Euractiv, Will Germany block the EU’s sustainable finance drive?, Sebastien Godinot
The EU is currently finalising a “taxonomy” aimed at shifting financial flows towards sustainable assets. However, Germany is leading a group of countries trying to muddy the waters by removing the disclosure requirement (…)
EU Reporter, Commission’s technical expert group launches a call for feedback on the taxonomy for sustainable economic activities
The expert group’s report follows on the Commission’s May 2018 legislative proposal on an EU taxonomy.
BNP Paribas Investors’ Corner, What does ‘green’ mean? The EU’s taxonomy spells it out
The proposed taxonomy, which will be continually updated and refined, aims to enable capital markets to identify and respond to investment opportunities that contribute to the EU’s environmental policy objectives.
In Spanish
El Pais, En busca de unas reglas del juego para la inversión responsable, Carlos Gómez Abajo
El grupo de expertos de la UE en finanzas sostenibles acaba de publicar tres informes en torno al plan, en concreto sobre la taxonomía (clasificación) de las actividades sostenibles, sobre los estándares para los bonos verdes (deuda emitida para financiar proyectos verdes) y sobre los parámetros climáticos de referencia.
El Periodico Byzness, "Las megatendencias sostenibles tendrán un gran impacto en nuestras vidas y en el mundo",
Desde una perspectiva regulatoria, al menos en la UE, las taxonomías y las agencias de calificaciones ESG y los ratings son temas de gran interés. El Plan de Acción de la UE sobre Financiación Sostenible aborda actualmente estas cuestiones.
Funds People, Dos ejemplos para explicar por qué era necesaria una taxonomía del ISR, Ana Palomares
Sin embargo, este boom de la ISR no ha ido acompañado de una hoja de ruta oficial sobre lo que se considera inversión responsable y lo que no ya que no ha sido hasta hace apenas un mes cuando la Comisión Europea ha publico un informe sobre la Taxonomía de la UE dedicada al clima que puede consultarse a través de este enlace.
In French
RSE Data News, Finance Verte : quels standards pour les indices climat européens?, Sophie Chauliac
Le 18 juin dernier, le Groupe d’Experts Techniques (TEG) de l’Union Européenne a publié ses recommandations sur les standards minimaux des benchmarks climatiques européens et les exigences de transparence des indices sur les aspects ESG.
Novethic, G7 finance: la France veut accélérer le développement de la finance verte
Ils ont proposé l’établissement d’une classification précise des activités économiques favorables à une transition bas carbone (la taxonomie), et la Commission a élaboré des lignes directrices sur le reporting par les entreprises de leurs informations liées au climat.
L’Usine Nouvelle, Le projet européen de label “investissement durable” prend forme - Economie, Anna Hubert
Cette taxonomie, qui pourrait devenir la référence en matière de finance durable, laisse certains secteurs sur la touche.
In German
Der Treasurer, So definiert die EU Nachhaltigkeit, Antonia Kögler
Die EU-Kommission hat den ersten Entwurf ihrer Taxonomie für nachhaltige Wirtschaftsaktivitäten vorgelegt. Ziel ist es, Investoren einen Kriterienkatalog an die Hand zu geben, der ihnen hilft, nachhaltige Investments zu identifizieren.
Vestors Capital, KfW bietet Investoren auch im zweiten Halbjahr 2019 liquide Anleihen
Deutsche Vertreter waren in alle Arbeitsstränge der TEG eingebunden. Die KfW war in der Expertengruppe zur Taxonomie sowie in der zum EU Green Bond Standard aktiv, konnte also ihre umfangreiche Expertise im Umwelt- und Klimaschutz einbringen.
***July coverage of 100 billion mark
See more coverage in June’s media digest
GreenBiz, While you were grilling, the world moved forward, Joel Makower
According to the Climate Bonds Initiative, global issuance of green bonds just hit yet another milestone, for the first time surpassing $100 billion inside six months. The $100 billion mark was first reached in November 2017 during the COP23 climate summit, and again the following September. Now, for the first time, the milestone has been reached during the first half of the year.
BFM Bourse, La France championne du monde de la dette verte
En juin dernier, une étude de l'organisation à but non lucratif Climate Bonds Initiative montrait déjà que près de 100 milliards d'euros d'obligations vertes avaient été émises par les Etats et les entreprises dans le monde depuis le début de l’année.
Investir - Les Echos, Finance verte : Paris intensifie ses efforts pour le climat
En effet, d’après l’organisme Climate Bonds Initiative, la France a émis plus de 15 milliards de dollars d’obligations vertes entre janvier et juin 2019 et devance ainsi, entre autres, les Etats-Unis et les Pays-Bas.
Boursier, La place financière de Paris se mobilise en faveur de la "neutralité carbone" à l'horizon 2050
Au 1er semestre la France est de nouveau le premier pays émetteur d'obligations vertes avec plus de 13 milliards d'euros d'émissions.
FASI, Green Bond: emessi oltre 100 miliardi nel 2019, Marta Bonucci
Secondo l’organizzazione internazionale Climate Bonds Initiative, il mercato delle obbligazioni verdi entro fine anno potrebbe raggiungere una cifra record, compresa tra i 180 e i 250 miliardi di euro.
CERTIFIED BONDS
Ferrovie Dello Stato (Italian State Railways)
Reuters, Ferrovie prezza green bond 700 mln a 7 anni, ordini oltre 2,4 mld
Ferrovie dello Stato ha lanciato un’obbligazione ‘green’ dell’importo di 700 milioni di euro a sette anni, scadenza 9 luglio 2026.
Rail Journal, Green Bond issue to finance FS fleet modernisation, Keith Barrow
Italian State Railways (FS) is planning to launch a second Green Bond issue after becoming the first Italian company to obtain environmental sustainability certification from the international Climate Bonds Initiative (CBI).
Qui Finanza, FS Italiane aggiorna il Green Bond Framework inserendo i treni Pop e Rock
FS è la prima azienda italiana ad aver ottenuto la certificazione internazionale per la potenziale seconda emissione obbligazionaria green dalla Climate Bonds Initiative, organizzazione no profit che promuove a livello mondiale la finanza sostenibile come strumento per contrastare i cambiamenti climatici.
Lezioni Europa, Ferrovie dello Stato Italiane emette un secondo Green Bond da 700 milioni, Giovanni Latorre
FS, Ferrovie dello Stato Italiane, ha emesso un secondo green bond. Il valore nominale di quest’ultimo è pari a 700 milioni di euro e la sua durata è pari a sette anni.
L’agenzia di Viaggi Magazine, Fs raccoglie 700 milioni di euro con i green bond
Con questa operazione Fs è la prima emittente corporate a finanziare l’acquisto di materiale rotabile per il trasporto merci con green bond e la prima emittente italiana ad aver ottenuto la certificazione dalla Climate Bonds Initiative (CBI), organizzazione no profit che promuove a livello mondiale la finanza sostenibile come strumento per contrastare i cambiamenti climatici.
Teleborsa, FS Italiane aggiorna il Green Bond Framework inserendo i treni Pop e Rock
FS è la prima azienda italiana ad aver ottenuto la certificazione internazionale per la potenziale seconda emissione obbligazionaria green dalla Climate Bonds Initiative, organizzazione no profit che promuove a livello mondiale la finanza sostenibile come strumento per contrastare i cambiamenti climatici.
Finanza Online, La carica dei green bond: centinaia di obbligazioni verdi ad alto rating in un unico ETF, Titta Ferraro
Per poter essere incluse nell’indice, le obbligazioni devono essere definite “Green” sulla base dei Climate Bonds Standard fissati dalla Climate Bonds Initiative. L’ETF è a replica fisica e presenta un TER (Costo Totale Annuo) di 0,25%.
Investireoggi, Obbligazioni verdi di Ferrovie dello stato: cedola un successo, meglio del BTp, Giuseppe Timpone
E’ stato il secondo “green bond” emesso da Ferrovie dello stato, che risulta essere il primo emittente italiano ad avere ottenuto la certificazione dalla “Climate Bonds Initiative”.
Travel Quotidiano, Fs più green: prima azienda italiana con Climate Bonds Initiative
Yahoo Finanza, Fs emette un secondo green bond da 700 milioni
First Online, Fs Italiane emette con successo green bond da 700 milioni
Transporti-Italia, Fs italiane: emesso secondo green bond con valore nominale 700 milioni di euro
Milano Finanza, Successo per il green bond delle Fs, Roberta Castellarin
and much more in Italian media.
Chile’s second sovereign green bond
Bloomberg, Chile estudia cambio a sostenibilidad en fondos de inversiones, Eduardo Thomson
A principios de este año, emitió con éxito un bono de 861 millones de euros (US$966 millones) con vencimiento en 2031 y títulos por US$1.400 millones con vencimiento en 2050 que cumplían con los criterios. El Gobierno trabajó durante aproximadamente un año para obtener las certificaciones para la venta e identificó una cartera valorada en US$4.400 millones de proyectos ambientalmente atractivos, dijo Pérez.
Diaro Financiero, Rompiendo paradigmas con bonos verdes, Andres Perez M.
Ademas, el portafolio de proyectos asociados a las emisiones fue certificado por Climate Bonds Initiative, con lo que Chile se convirtió en el tercer país en recibir esta exigente certificación, y en el primer en el continente americano en emitir este tipo de instrumentos, reforzando su liderazgo regional.
Lexlatin, Chile hace historia al emitir el primer bono verde soberano de la region, Ingrid Rojas
El Ministerio de Finanzas informó que el marco para bonos verdes suscrito por Chile fue evaluado exitosamente por Vigeo Eiris a finales de mayo, mientras que la cartera de proyectos asociada a la emisión de los bonos fue certificada por Climate Bond Initiative.
Latin Lawyer, Chile issues Latin America’s first green sovereign bonds, Fredrik Karlsson
The Republic of Chile has hired Cleary Gottlieb Steen & Hamilton LLP in Buenos Aires and New York and Morales & Besa in Santiago to issue Latin America’s first ever green sovereign bonds, through two international transactions worth a total of US$2.4 billion.
Bonds & Loans, Red Hot Chile Paper: Orders Soar for Latin America’s First Sovereign Green Bond
Chile’s impeccably timed and well-executed deal saw a near 10x oversubscription on its dual-tranche green issuance worth nearly USD2.4bn (equivalent) (…)
UOL Economia, Dívida verde começa a atrair países emergentes
Segundo a Climate Bonds Initiative (CBI), organismo de referência em matéria de dívida responsável, a Nigéria "se prepara para uma segunda emissão".
Gestion, Chile estudia cambio a sostenibilidad en fondos de inversiones
El Gobierno de Chile, que está enfocado en la sostenibilidad en el año que organiza la mayor conferencia ambiental del mundo, podría asignar una mayor parte de sus inversiones a proyectos respetuosos con el medio ambiente.
El CEO, Chile es lider de la 'deuda verde' entre los paises emergentes
Much more coverage in the June media digest.
Auckland council
Our Auckland (Auckland council), More Green Bond success for Auckland Council
Auckland Council’s green bonds issuance programme has also been certified by the Climate Bonds Initiative as meeting the criteria set out in the Climate Bonds Standard.
Voxy, Investors keen on green: bond issues raise $350 million for Auckland
Auckland Mayor Phil Goff says the combined $350 million raised through the framework will be strongly welcomed by ratepayers.
Interest.co.nz, Auckland Council on target with its second Green Bond offer
Auckland Council was awarded a Certificate of Recognition at the Climate Bonds Initiative 2019 Green Bond Pioneer Awards in London earlier this year. The certificate is awarded to issuers, regulators and service providers that have played a pivotal role in growing the Green Bond market in 2018.
Meidensha Corporation
Clean Technica, Japanese Company Sells Green Bonds To Fund EV Parts Production
The company claimed that it became the first private enterprise to have received certification from the Climate Bonds Initiative.
