Climate Bonds Initiative - Report “Bonds and Climate Change – the State of the Market in 2013“
Climate Bonds Initiative carries out important research on climate-themed bonds. The last report has now been released. The aim is to reduce the cost of capital for climate related investments, while at the same time seeing the creation of safe and secure investments suitable to the needs of pension and insurance funds.
Climate Bonds Initiative carries out important research on climate-themed
It is an investor-focused
not-for-profit working to mobilize bond markets for climate change
solutions. These involve a rapid transition to a low-carbon
and climate resilient economy
The published report
- The total universe of bonds linked to key
climate themes stands at USD 346bn, double last year’s estimate.
- The issuance of new climate-themed bonds was
USD 74bn in 2012, up 25% on 2011.
- China accounts for USD 127bn of the total,
followed by the UK and France.
- CO2 transport, notably rail, accounts for 75%,
followed by clean energy and climate finance.
- 89% of the USD 346bn universe is investment
The report can be downloaded here
The Climate Bonds Initiative is:
1. Providing policy models and advice
Rapid change at very large scale will depend on a close working
relationship between government, finance and industry. The Climate Bonds
Initiative is developing policy proposals for all three sectors, including:
2. Developing trusted standards
- How to boost bank lending to renewables by
adapting the $3 trillion covered bonds market to create renewable energy
- Delivering on the promise of large-scale energy
efficiency (e.g. getting to 85% of housing stock within 10 years).
- Policy risk insurance for renewable energy bonds,
to be provided by a consortium of governments.
The Climate Bond Standards Board is developing standards for investments
eligible to be called Climate Bonds.
This will provide greater certainty for investors about the climate benefit
of their investments, especially in controversial areas like energy efficiency
Board members are California State Teachers’ Retirement System (CalSTRS),
the State Treasurer of California, the (US) Investor Network on Climate Risk,
the Natural Resources Defense Council, the Carbon Disclosure Project, and the
(Australian) Investor Group on Climate Change.
An Industry Working Group consults with the Climate Bond Standards Board.
Members include representatives from: Standard & Poor’s, Aviva Investors,
the IFC (a part of the World Bank Group), KPMG, PricewaterhouseCoopers, DNV and
Calvert Funds Management.
The Board has already created standards for wind energy bonds and has
certified its first bond, soon to be launched. Solar and energy efficiency
investments will be the next to be certified.
3. Launching demonstration projects
The aim of these ‘proof-of-concept’ projects is to demonstrate
investibility and the potential to finance with Climate Bonds.
For example, working with municipalities in England, the Climate Bonds
Initiative is developing a plan for securitization of residential energy
efficiency loans with the aim of providing a financing pipeline for the whole country.
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