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Green Bonds Use of Proceeds-Trends and Best Practice

 

LONDON/FRANKFURT - June 27, 2017 (Investorideas.com Newswire) The Climate Bonds Initiative will release its latest report: Post Issuance Use of Proceeds - Trends and Best Practice tomorrow (28/06) at a Berlin Hyp Green Bonds Event held in Frankfurt am Main. The report has been produced in partnership with Berlin Hyp, BlackRock Inc., and Luxembourg Green Exchange.

The new report is Climate Bonds Initiative's first detailed study of current practice around post-issuance reporting of green funding and monitoring of green bond allocation, primarily in the corporate market, in line with initial commitments.

Post-Issuance Use of Proceeds - Trends and Best Practice encompasses data from 146 issuers (Corporate 43%, Municipal 38%, Commercial Banks 12%, Govt agencies and entities 4% and ABS 3%) and 191 green bonds issued up to 1 April 2016 to the value of USD66bn.

The analysis finds that the majority of issuers provided a degree of public information after issuance with 74% of bonds complying (by number) or 88% by value within the dataset. The report also provides examples of best practice by country and by issuer.

Whilst noting an improving trend in transparency, Post-Issuance-Use of Proceeds - Trends and Best Practice reflects that additional progress still needs to be made for the market to maintain its integrity in areas such as comparability, recommended guidance and failure to report.

To achieve this improvement, core recommendations are set out for both issuers and regulators around:

Comparability

Meeting recommended guidance

Failure to report

Leadership by large issuers

Regulator market guidelines

Common databases and basic reporting templates

Gero Bergmann, Member of the Board of Management of Berlin Hyp:

"Transparent and solid reporting are a robust foundation for integrity in the green bond market. If we want to continue sustainable growth in the market and contribute to mobilizing urgently needed private capital for environmental & climate-related projects, we should secure investors' confidence in green bonds by supporting quality in green bond reporting. This report clearly assists in achieving that goal."

Ashley Schulten, Director & Head of Climate Solutions, Fixed Income, BlackRock:

"Impact reporting has been a focus of our work on Green Bonds at BlackRock for several years. In 2014, when we met with issuers of green bonds and pressed for impact reporting metrics we were routinely told how difficult this would be to provide and why."

"Today, this Use of Proceeds report from Climate Bonds Initiative reflects the tremendous progress the market has made in this area."

"The development of harmonized reporting guidelines supported by the Green Bond Principles, increased comfort from issuers around disclosure, and positive feedback from investors have paved the way to a significant pick up in quality of environmental reporting on Green Bonds."

Jane Wilkinson, Head of Sustainable Finance at Luxembourg Stock Exchange:

"Transparent and comparable reporting on use of proceeds and project impact is a critical component to boosting investor confidence, hence building scale in the green bond market. This Climate Bonds report reflects there are still areas for improvement."

"The mandatory requirements for green bonds admitted to the Luxembourg Green Exchange (LGX) are a fantastic way for LGX to promote more widespread reporting. And issuers have embraced this initiative - less than a year after the launch of LGX we already display over 50% of the world's listed green bonds and our issuers are clearly committed to transparency. To date, all green bonds displayed on LGX have submitted post-issuance reporting within the relevant reporting deadline."

"Regular reporting and consistent disclosure are amongst the practices that the report recommends should be more widely embedded in green bond markets."

Sean Kidney, CEO Climate Bonds Initiative:

"International green bond markets need to accelerate in depth and diversity to meet country climate finance goals. This report reflects the best practice examples by market leaders and where progress is still needed."

"Wider adoption of its recommendations as the standard by regulators, issuers and potential issuers will strengthen market guidance and give institutional investors' confidence to commit long term capital allocations at the scale now required to meet global emissions reduction targets."

Climate Bonds:

Andrew Whiley
Head of Communications & Media
+44 (0)7506 270 943
andrew.whiley@climatebonds.net

Berlin Hyp AG:

Bodo Winkler
Treasury
Investor Relations & Sales
+49/30/2599-9521
Deutschland

LuxSE:

Zuzanna Reda-Jakima
+352 47 79 36 526
zrj@bourse.lu

Notes for Journalists:

About Post-Issuance Use of Proceeds - Trends and Best Practice:

Dataset: 146 issuers and 191 Green Bonds issued up to 1 April 2016 to value of USD66bn.

Bonds included in the analysis:

Bonds excluded from the analysis:

Market standards and guidelines used as baseline reporting frameworks:

Best Practice Examples by Country of Issuer: Australia, China, France India, Sweden

Best Practice Examples in Contents of Reporting: ANZ Bank, Berlin Hyp, California State, City of Gothenburg, DC Water, Kommuninvest

A breakdown of best practice by both country and issuer is available in the report.

A full copy can be found here.

About Climate Bonds Initiative:

The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low-carbon economy.

It undertakes advocacy and outreach to inform and stimulate the market, provides policy models and government advice, market data and analysis and administers an international Standards & Certification Scheme for green bonds.

For more information, please visit www.climatebonds.net.

About Berlin Hyp:

Berlin Hyp specialises in large-volume real estate finance for professional investors and housing societies, for whom the Bank develops individual financing solutions. As an enterprise forming a Group together with the German savings banks, it also makes an extensive spectrum of products and services available to these institutions.

Berlin Hyp's clear focus, almost 150 years of experience and its close proximity to the Savings Banks Finance Group characterise the Bank as a leading German real estate and Pfandbrief bank. http://www.berlinhyp.de

Luxembourg Stock Exchange (LuxSE)

We are not like other exchanges. Our core business is listing: we are home for roughly 37,000 securities issued by entities from more than 100 countries. All the securities are available for trading on our markets: an EU-regulated BdL market and the exchange-regulated Euro MTF.

We are also the first and, so far, the only exchange in the world to operate a platform dedicated entirely to green, social and sustainable securities. Launched in 2016, the Luxembourg Green Exchange (LGX) has become a meeting place for green-focused issuers and investors. Currently LGX displays securities worth EUR 54 billion, more than a half of all listed green bonds in the world.

For more information visit www.bourse.lu

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole, or in part, on any information contained within this or any other Climate Bonds Initiative public communication.

Disclosure: Several organisations named in this communication and in the Post Issuance Use of Proceeds - Trends and Best Practice report are Climate Bond Partners. A full list of Partners can be found here.


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