Green Bonds: Financing a Low Carbon Future – Event Highlights

The FWA Impact Investing Committee with the generous support of S&P Global brought together leaders in the Green Bond space on June 1 for a lively (and timely given President Trump’s June 1 announcement of the USA pulling out of the Paris Climate Agreement) discussion of the growing demand from assets owners and managers for Green Bonds and the markets response to these demands.

Most green bonds support projects that target energy efficiency, pollution prevention, clean transportation, sustainable water and agriculture, and protection of forests and fishery ecosystems.   Moody’s noted that green bond issuance soared to a record high in 2016, accounting for $93.4 billion worth of investment worldwide and is expected to grow to more than $200 billion in 2017.

Charlotte Peyraud of Sustainalytics and co-chair of the Impact Investing Committee moderated the panel discussion which explored the growth of the green bond market, how issuers are supporting the transition to a lower carbon economy, and the tools and products available to investors to access the market. The panelists included:

  • Susan Gray, Global Head of Infrastructure, S&P Global Ratings
  • Alka Banerjee – Head of Global Equity Indices, S&P Dow Jones Indices
  • Divya Bendre – Associate, Sustainable Finance, HSBC
  • Eric Glass – Senior Portfolio Manager, AllianceBernstein
  • Laura Segafredo – Vice President, Global Fixed Income Climate Solutions, BlackRock

 

Main takeaways:

  • The event, which explored the connection between the Paris Agreement commitments and climate finance solutions, could not have been more topical on the day the US federal government announced it would exit the deal.
  • While there are many strategies seeking opportunities, and avoiding the risks associated with climate change, growth of the green bond market has emerged as one of the most promising ways to allocate capital for specific climate finance solutions.
  • The green bond market, while still a fraction of the overall bond market, has increased rapidly over the past few years with USD 100-150 billion in issuance expected this year. There are new investable products coming to market to help grow the market and allow investors to participate (for example BlackRock’s ETF and VanEck’s ETF based off S&P’s Green Bond Index)

Special thanks to Louise Raymond and S&P Global, Katrin Dambrot and the FWA Office, and Charlotte Peyraud, Sustainalytics.

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