Climate Bonds launches new Climate Resilience Principles for US market
Framework for accelerating climate resilient investments in green bond market
New York: 24/09/2019: 06:00 EST: Today at a meeting of the Global Adaptation & Resilience Investment Working Group (GARI), the Climate Bonds Initiative released for the US market new Climate Resilience Principles (CRP) – a high-level guidance for governments, investors and banks to determine when projects and assets are compatible with a climate resilient economy.
The Climate Resilience Principles were developed as a partnership between the Climate Bonds Initiative and the World Resources Institute (WRI) and Climate Resilience Consulting using an Adaptation and Resilience Expert Group (AREG), comprised of more than 30 specialists from leading international authorities in the adaptation and resilience space.
Sean Kidney, CEO, Climate Bonds Initiative:
“Climate change is accelerating; the US is already experiencing crazy fires, hurricanes and floods, extreme because of the impact of climate change. While we work hard to reduce emissions to avoid catastrophic consequences, we now also have to address the challenge of what will be, unfortunately, a century of extreme climate volatility and rising sea levels.”
The Climate Resilience Principles will provide guidance for investors, companies and corporations – and for the green bonds market. It will be used by issuers as guidelines and embedded within Climate Bonds Certification for green investment.
An example: in a world first, last week the European Bank of Reconstruction and Development (EBRD) issued a USD700 million Climate Resilience Bond where the earmarked projects for the use of proceeds were selected and are managed in alignment with the Climate Resilience Principles.
Leonardo Martinez-Diaz, Global Director, Sustainable Finance Centre, World Resources Institute:
“The Climate Resilience Principles will help capital markets support countries adapting to climate impacts. We hope this will unlock a major source of finance and bring us closer to meeting the Paris Agreement’s goal of aligning all finance flows with climate goals.”
The Principles essentially require measures to be taken (in asset or project design, construction or adaptation) that ensure the asset or project is 'fit for purpose' in the face of a changing climate. They cover:
- Boundaries and interdependencies for assessing climate risks and resilience impacts are clearly defined
- Physical climate risk assessment undertaken - using both top down risk assessment and observed data
- Risk reduction measures undertaken– commensurate with coming climate change and operational life
- Climate resilience benefit assessment undertaken
- Mitigation trade-offs- the asset or activity must not lock in fossil fuels or undermine any international or national commitments.
- Ongoing monitoring and evaluation as risks evolve
The Principles come at a time when adapting to climate risks opens new opportunities, in both developed and emerging economies, in areas including heat-resilient building materials, water-efficient technology, (embracing drip irrigation) and early warning systems for climate hazards, among many others.
Joyce Coffee, Technical Lead, Adaptation and Resilience Expert Group (AREG):
"These principles aim to increase funding and finance for climate resilience projects that ultimately make investments more effective, secure and durable. In the face of the climate shifts to come, strengthening of resilience factors across all facets of investment decision-making will help improve lives and livelihoods.”
Climate Bonds Initiative will now reconvene sector-specific Technical Working Groups who will use the Principles to develop sector-specific Criteria so that green bonds delivering climate resilience can be recognised and certified under the Climate Bonds Standard, and certified bonds focusing on climate mitigation impacts are also addressing climate resilience.
All the recommendations within the Climate Resilience Principles are aligned with the proposals on adaptation in the EU Taxonomy of Sustainable Finance.
Download the Climate Resilience Principles Framework Paper
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About Climate Bonds Initiative: Climate Bonds Initiative is an international investor-focused not-for-profit organisation working to mobilise the USD100tn bond market for climate change solutions. Climate Bonds carries out market analysis, policy research, market development; advises governments and regulators; and administers a global green bond Certification Scheme. Please visit http://www.climatebonds.net.
About World Resources Institute: WRI’s mission is to move human society to live in ways that protect Earth’s environment and its capacity to provide for the needs and aspirations of current and future generations. WRI focusses on seven urgent global challenges global challenges that must be addressed to reduce poverty, grow economies and protect natural systems: Climate, Energy, Food, Forests, Water, Sustainable Cities and the Ocean. For more information please visit https://www.wri.org/.
About GARI: The Global Adaptation & Resilience Investment Working Group (GARI) is a private sector, private investor-led initiative that was announced at Paris COP21 in conjunction with the UN Secretary General’s Climate Resilience Initiative. The working group brings together private and public sector investors, bankers, leaders and other stakeholders to discuss critical issues at the intersection of climate adaptation and resilience and investment with the objective of helping to assess, mobilise and catalyse action and investment www.garigroup.com.
About Climate Resilience Consulting: CRC works with governments, cities, NGOs and the private sector to build adaptation tools and resilience to climate stresses and shocks. For more information please visit https://www.climateresilienceconsulting.com/.
About the Adaptation and Resilience Expert Group: CBI convened an Adaptation and Resilience Expert Group (AREG) in November 2018 to determine overarching principles for defining climate resilient assets and bonds. AREG comprises of over 30 specialists from leading international authorities in the adaptation and resilience space from academia, public and private sectors of climate science and practice.
Joyce Coffee, AREG Technical Lead & CEO, Climate Resilience Consulting
Puja Sawhney, Coordinator, EU Switch: Asia SCP Facility
Neuni Farhad, Project Officer: Adaptation Research, C40 Cities Climate Leadership Group
Karoline Hallmeyer, Assistant Manager & ESG Advisor, KPMG
Federico Mazza, Adaptation Lead, Climate Policy Initiative
Craig Davies, Head of Climate Resilient Investments, EBRD
Carel Cronenberg, Head of Climate Resilient Investments (Associate Director-MRV Manager), EBRD
Cinzia Losenno, Senior Climate Change Specialist, EIB
Emilie Mazzacurati, Founder and CEO, Four Twenty Seven
Josh Sawislak, Strategic Advisor, Four Twenty Seven
Carmen L. Lacambra, Head of Research & Environmental Services, Grupo Laera
Nathanial Matthews, Program Director Global Resilience Partnership
Swenja Surminski, Senior Research Fellow, Grantham Research Institute
Celeste Connors, Executive Director, Hawaii Green Growth
Vladimir Stenek, Senior Climate Change Specialist, IFC
Jay Koh, Managing Director, Lightsmith Group
Aris Papadopoulus, Founder, Resilience Action Fund, UNISDR-ARISE
Kevin Bush, Chief Resilience Officer, Washington D.C. Government
Miroslav Petkov, AREG Observer, Director, S&P Global
Richard J.T. Klein, Senior Research Fellow, Stockholm Environment Institute
Peter Wheeler, Executive Vice President, The Nature Conservancy
Jenty Kirsch-Wood, Senior Technical Specialist, UNDP
Michael Cote, Project Director Private Investment for Enhanced Resilience, Winrock International
Carlos Sanchez, Director, Climate Resilience Finance, Willis Towers Watson,
Stephane Hallegatte, Lead Economist, GFDRR, World Bank
Niranjali Amerasinghe, Senior Associate of Sustainable Finance Centre, WRI
Karl Mallon, Director, XDI
Yoon Kim, Ph.D. Head of Global Client Services, Four Twenty Seven
Christine Lafon, BNP Paribas
Xianfu Lu, Senior Climate Change Specialist (Adaptation) Sustainable Development & Climate Change Dept., Asian Development Bank
John Thieroff, Vice President- Senior ESG Analyst, Moody’s Investor Service
John Firth, CEO & Co-founder Acclimatise
Brooks Preston, Managing Director, Macquarie Infrastructure & Real Assets Investments Ltd.
Examples of investment in climate resilience:
TYPE 1: Investments that enhance the climate resilience of assets over their design lifespan
TYPE 2: Investments that aim to increase the climate resilience of the broader system