Goal to Assure Integrity of Green Claims for Investors, Governments
Australia’s Investor Group on Climate Change (IGCC), representing institutional investors, with total funds under management of approximately $600 billion, today announced that it is joining the International Climate Bond Standards Board. The Standards Board is supervising a program to provide investors and governments an easy way to assess the integrity of environmental claims for green bonds.
1. Climate Bonds Standard text delayed until July.
We're running late. We had planned to release the first version of the new Climate Bonds Standard text in May, after addressing issues raised in our public consultation phase. But we're still addressing comments on areas such as balance sheet reporting requirements for corporate Climate Bonds, on referencing - or not - other governance or environmental standards, and on the nature of sanctions for non-compliance. The release is now scheduled for the early to mid July. Thank you for your patience.
2. We welcome 3 new members of the Climate Bonds Advisory Panel from Turkey, NZ and Canada:
Goal to Assure Integrity of Green Claims for Investors, Governments
SACRAMENTO & LONDON – California State Treasurer Bill Lockyer today announced he has joined the Climate Bond Standards Board, which is supervising a program to provide investors and governments an easy way to assess the integrity of environmental claims for green bonds.
Climate Bonds Initiative Chair Sean Kidney announced in London today that the Carbon Disclosure Project is joining the Climate Bond Standards Board, supervising a program to provide investors and governments with an easy way to assess the integrity of environmental claims for green bonds.
Mr Kidney said: “According to the International Energy Agency we need at least a trillion dollars a year to be flowing into low-carbon industries if we’re to avert catastrophic climate change. That money will come largely from bond markets. We need to ensure it’s invested properly.”
The draft Climate Bonds Standard has now been release for public comment - you have 30 days! Please do review and comment. Media release is below:
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A recent report prepared for Barclays by Accenture has placed the need for the standardisation of green bonds front and centre for efforts to finance a low carbon economy.
The report estimated that up to €2.9 trillion of procurement and development capital will be needed for the roll-out of low carbon technologies across the EU25 by 2020. They estimate that 'green' bonds in the form of asset-back securities could account for €1.4 trillion of this total. The figure includes the sum of likely project finance debt, asset finance term loans, asset lease financing, and primary bonds that could be securitised into green asset-backed securities.
Speaking at a State Street Global Advisors Green Bonds Summit in Boston, Climate Bonds Initiative Chair Sean Kidney announced that the Natural Resources Defence Council (NRDC) had joined the Governing Authority of the Climate Bonds Certification and Standards Scheme.
The Standards Scheme will help spur the growth of the global green bonds market by giving investors and governments an easy way to assess the integrity of environmental claims.
Mr Kidney said: "According to the International Energy Agency we need at least a trillion dollars a year to be flowing into low-carbon industries if we're to avert catastrophic climate change. That money will come largely from bond markets. We need to ensure it's invested properly."
CBI network member Ben Caldecott has published a piece on green bonds in the British Guardian newspaper (http://www.guardian.co.uk/environment/cif-green/2011/jan/11/what-are-gre...).
Environmental Finance has just published an article. Responsible Investor briefly reports on the project. And Verdantix list Climate Bonds as one of their Ten Predictions for Sustainable Business in 2011.
From the Verdantix report: "Climate bonds will spur financial innovation for sustainability. Broader marketing of climate bonds – debt finance for climate change mitigation and adaptation projects –will increase financing options available for low carbon infrastructure." etc.
The Climate Bonds Initiative has now secured funding for a project to develop an international standards and certification scheme for Climate Bonds.
One of the issues the Climate Bonds Initiative has canvassed in the past has been the need for standards around the labeling of "green" debt.
The aim of the certification project is to develop a means to give assurance for investors and NGOs about whether funds are being invested in credible manner. This will support liquidity, so that investors can buy and sell climate bonds knowing that if they stick to certified bonds they can be assured different bonds will have the same level of environmentally credibility.
As the Cancun sun sets .... Russia helps sink Kyoto / UK Climate Change Committee a hit / Climate Finance Fund gets up / China’s low carbon Five Year Plan ... see below.
1. The UK Climate Change Committee (a statutory body under their Climate Action Bill) was popular amongst Cancun NGOs this week with its call for 60% emission cuts in the UK by 2030 and 50% by 2025. One NGO newsheet called it a “ray of sunshine”.
1. IFC on their US$200 mil of Green Bonds2. Climate bond tipping points and issue volumes3. Climate Bonds Standards4. Transition to a low carbon economy: what is missing?5. Green investment banks6. New Climate Bonds Initiative Advisory Panel members
1. IFC issues US$200 mil of Green Bonds
Our guest for the evening, Shilpa Patel, Climate Change Chief at the International Finance Corporation (IFC), told us that the IFC had just issued a $200 million Green Bond; it's a regular IFC bond but proceeds are ring-fenced and only applied to climate-friendly investments. The bond is a test; if the market is receptive, as it looks like it will be, expect a lot more Green Bonds.
