Developments in Global Green Bond Markets
Explore the rapid growth and benefits of green bonds, market breakdown by sector, global market overview, guidelines, and tools for local market development in the international green bond market. Learn about the latest initiatives, principles, and tools driving the sustainable finance movement.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
International Developments on Green Bond Markets Justine Leigh-Bell, Director Climate Bonds Initiative 3 August 2017 www.climatebonds.net
Green bonds rapid growth BENEFITS Issuers Investor diversification Market positioning Pricing Investors Addressing climate risk Financial returns w/ environment benefits Secondary market value China went from zero to 40% of issuance in 2016 www.climatebonds.net
Green bonds breakdown by Sector www.climatebonds.net
A Global Market Netherlands $14bn Germany $15bn France $19bn Supra- nationals = $42bn Sweden $6bn Canada $3bn USA $35bn China $36bn Mexico $2.6bn India $3bn Brazil $3bn > $10bn outstanding $1bn - 10bn outstanding < $1bn outstanding www.climatebonds.net
Guidelines and Reviews Green Bond Principles ICMA Proceeds must go to green / Explain process for project selection; use 2nd party review / Track proceeds; use auditor to verify / Report each year on details Climate Bonds Standard & Certification: incorporates GBPs into a standardized framework with green definitions National Green Bond Guidelines: China, India, Nigeria, South Africa, Brazil ASEAN Green Bond Framework Moody s/ S&P green assessment tools: quality of review & reporting www.climatebonds.net
Tools for local market development Strategic public green bond investment Credit enhancement Provide tax incentives Develop instruments to aggregate assets and structure risks Cornerstone funds set up by Government to provide credit enhancements, aggregation, warehousing and market making services. Create standard documentation (e.g. for loan, lease and power purchase agreements) that can be easily aggregated and securitized. www.climatebonds.net
Stock Exchanges Developing green bond guidelines Promoting transparency and common practices Establishing green bond lists or segments for investors Supporting green bond indices or ETFs for investors to track performance Fostering market education and assisting investors in understanding wider climate risks and opportunities. Luxembourg Green Exchange (LGX), London Stock Exchange (LSE), Borsa Italiana (BI),The Nigerian Stock Exchange (NSE) and Johannesburg Stock Exchange (JSE) www.climatebonds.net
The Year of Sovereigns First to market: Poland (2016) and France (2017). In the pipeline: Nigeria, Argentina, Kenya, Mexico Benefits: Raising capital to finance infrastructure in line with its NDCs Attracting new investors Providing policy certainty Improving collaboration between ministries Impact of Sovereign green bonds: Kick-starting a domestic market Providing scale and liquidity to the green bond market Using signalling power to other green bond market players Diversifying the green bond market/tapping into new investor segments www.climatebonds.net
Central Banks and Regulators 1. Market Infrastructure Set up green bond guidelines and harmonise definitions Simplify approval processes for green bond issuance Utilise financial technology (FinTech) to increase green bonds liquidity 2. Prudential Regulatory Policy Differentiate capital requirements based on climate risk of assets Bank stress testing to embrace environmental risk analysis 3. Monetary Policy Include green bonds into central bank s collateral framework Provide preferential liquidity-providing operations to green Lower haircut at discount window facility against green bonds collateral Quantitative Easing (QE) operations targeted at green bond assets www.climatebonds.net
Central Banks and Regulators The Taiwan Financial Supervisory Commission issued guidance on green finance The Securities Exchange Board India (SEBI) issued Disclosure Requirements for issuance and listing green bonds. The Monetary Authority of Singapore announces Green Bond Grant scheme China Securities Regulatory Commission (CSRC) released a set of new guidelines for green bonds issuance by listed companies. PBoC plans to support green finance by incentivising commercial banks to extend loans for green projects. Central bank of Singapore that has launched a support scheme for first- time issuers to cover the cost of verification. www.climatebonds.net
China Green Bond Market Policy Development China s 13th Five Year Plan requires a green financial system to be developed The release of official guidelines has driven the development of China s green bond market The Guidelines for Establishing the Green Financial System was jointly released by 7 ministries. 11 11
China market - Future Developments Expect more incentives in 2017, especially at a provincial and city level. Market regulations & guidelines from different Ministries will be harmonised Making it easier for foreign investors to invest in domestic green bonds Capacity building for verifiers Market education 14
Thank you www.climatebonds.net justine@climatebonds.net www.climatebonds.net
![Halal_Chicken_from_Brazil-_Ensuring_Quality_and_Authenticity[1]](/thumb/86918/halal-chicken-from-brazil-ensuring-quality-and-authenticity-1.jpg)
