“The emergence of green bonds
represents one of the most significant
developments in the financing of low- carbon, climate-resilient investment
opportunities.” Ban Ki Moon, UN Secretary-General
Since the first Bonds and Climate Change: State of the Market report in 2012 there has been a huge growth in labelled green bonds. Equally there remains a large unlabeled universe of climate-aligned bonds available for investment now. For the purposes of this report the total climate-aligned bonds are both labelled green bonds (with defined use of proceeds) and unlabeled bonds issued by climate-aligned entities. They estimate the universe of climate aligned bonds outstanding to be $597.7bn. The universe is made up of 2,769 bonds from 407 issuers. These bonds span across six climate themes; Transport, Energy, Buildings and Industry, Agriculture and Forestry, Waste and Pollution, and Water. The largest theme in the $597.7bn climate-aligned universe continues to be Transport with $418.8bn bonds outstanding since January 1, 2005. Rail accounts for 95% of this, largely from state backed entities. Energy ($118.4bn) is the second largest sector, with 20% of the universe. This theme is comprised of a range of renewable energy power producers including hydropower, wind, solar, bioenergy, geothermal and nuclear (p5). Buildings and Industry ($19.6bn) is the third main theme and has captured the attention of the labelled green bond market in the past year. The remaining themes, Water ($3.2bn), Waste & Pollution ($7.1bn), and Agriculture & Forestry ($2.3bn), are crucial investment areas for climate adaptation. These will require scaling up if we are to address the climate risks of food supply, flooding, water scarcity, and health issues, such as pollution.
The climate-aligned universe has increased by $95bn since the 2014 report. Almost a third of the increase (32%) came from the rapid growth of the labelled green bond market (additional $30.6bn of green bonds). Unlabeled climate-aligned bonds financing rail in China, India, France, South Korea and the UK contributed another 40% of the increase. The climate-aligned universe has a range of maturities. The majority of outstanding issuances have tenors over 10 years. This reflects the long-term nature of climate assets such as rail infrastructure bonds.
https://www.climatebonds.net/files/files/Green%20Bonds%20101%20Slides.pdf
https://www.climatebonds.net/files/files/CBI-HSBC%20report%207July%20JG01.pdf
Since the first Bonds and Climate Change: State of the Market report in 2012 there has been a huge growth in labelled green bonds. Equally there remains a large unlabeled universe of climate-aligned bonds available for investment now. For the purposes of this report the total climate-aligned bonds are both labelled green bonds (with defined use of proceeds) and unlabeled bonds issued by climate-aligned entities. They estimate the universe of climate aligned bonds outstanding to be $597.7bn. The universe is made up of 2,769 bonds from 407 issuers. These bonds span across six climate themes; Transport, Energy, Buildings and Industry, Agriculture and Forestry, Waste and Pollution, and Water. The largest theme in the $597.7bn climate-aligned universe continues to be Transport with $418.8bn bonds outstanding since January 1, 2005. Rail accounts for 95% of this, largely from state backed entities. Energy ($118.4bn) is the second largest sector, with 20% of the universe. This theme is comprised of a range of renewable energy power producers including hydropower, wind, solar, bioenergy, geothermal and nuclear (p5). Buildings and Industry ($19.6bn) is the third main theme and has captured the attention of the labelled green bond market in the past year. The remaining themes, Water ($3.2bn), Waste & Pollution ($7.1bn), and Agriculture & Forestry ($2.3bn), are crucial investment areas for climate adaptation. These will require scaling up if we are to address the climate risks of food supply, flooding, water scarcity, and health issues, such as pollution.
The climate-aligned universe has increased by $95bn since the 2014 report. Almost a third of the increase (32%) came from the rapid growth of the labelled green bond market (additional $30.6bn of green bonds). Unlabeled climate-aligned bonds financing rail in China, India, France, South Korea and the UK contributed another 40% of the increase. The climate-aligned universe has a range of maturities. The majority of outstanding issuances have tenors over 10 years. This reflects the long-term nature of climate assets such as rail infrastructure bonds.
https://www.climatebonds.net/files/files/Green%20Bonds%20101%20Slides.pdf
https://www.climatebonds.net/files/files/CBI-HSBC%20report%207July%20JG01.pdf
I think Green bonds are a step in the right direction at least but like everything really they could always use some fine tuning but it is a positive step nevertheless and hopefully they begin to proliferate.
ReplyDelete