Green Bonds Take Centre Stage Following 2016 record Boost

Only a few days before leaving the White House, President Barack Obama delivered $500 million to the United Nations’ Green Climate Fund, to help developing countries combat climate change.

Less than a month after taking office Donald Trump’s administration made it clear, via a statement posted on the white house website, which echoed the newly elected president’s campaign pledges, that a change of direction was due, calling efforts harmful and unnecessary.

The statement: America First Energy Plan read:

“President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan and the Waters of the U.S. rule. Lifting these restrictions will greatly help American workers, increasing wages by more than $30 billion over the next 7 years.”

It is yet to be revealed whether a Trump presidency may push climate change down the policy agenda lowering the momentum, discouraging issuance. Yet despite uncertainty, investor’s desire for green products remains.

Global Green Market Doubles

In 2016, the green bond market grew by more than $80 billion – a record year since its launch in 2007 — to $170 billion, according to Climate Bonds Initiative (CBI), a London-based non-profit that certifies green credentials of bonds.

Join Thomson Reuters March 6th at the Climate Bonds Initiative annual conference and get the latest on:

1. The big issues

• What 2016 gave us, the challenges for 2017
• The global industrial and economic transition we need and investor imperatives
• How green bond markets are being developed in China, India, LatAm and the USA

2. Enabling frameworks

• The role of the public sector
• How central banks and regulators can step up to promote green bond issuance

3. Opportunities for issuance

• New instruments: green Islamic bonds, green loans
• New sectors for 2017: agriculture, industrial processes, broadband
• Where to with green covered bonds
• The opportunity with green bonds funds and debt infrastructure funds
• Pricing development

To find out more about this event click here.

As of the 3rd quarter 2016, Thomson Reuters and the Climate Bonds Initiative collaboratively resourced Green Bonds underwriter league tables, combining all global green certified underwritten bonds and US Municipals which comply with the Green Bonds principles.

According to figures compiled by Thomson Reuters and The Climate Bonds Initiative, the Green Bonds sector recorded continued market growth in 2016, with global proceeds up 104.9% over 2015.

Key Facts & Figures

• The dominant macro industry sectors included Financials (47.6% share), Government & Agencies (26.7%) and Energy & Power (18.5%). Chinese borrowers issued just under a third of total global green bonds proceeds, with US$23.6 billion raised.

• Significant deals in the past year included the largest green bond from a US Corporation to date by Apple Inc, with the US$1.5 billion proceeds designated towards reducing the company’s impact on climate change. BRF debuted the first green bond in Brazil with its US$500m offering in October. In Europe, French railway operator SNCF priced its first certified Green Bond offering (€900m).

• The Bank of China posted a four-tranche US$2.8 billion transaction to finance projects including clean transportation and sustainable water management, which was also the first time a Chinese financial institution had listed a deal on the Luxembourg exchange.

• According to estimates provided by Thomson Reuters/Freeman Consulting, the top green bond fee earner globally was JP Morgan with US$16.9 million, resulting in a 7.7% fee pool share, centered on strong activity in the corporate and agency sectors.

To find out more about the Climate Bonds Initiative annual conference click here.

Thomson Reuters League Table rankings of investment banks and law firms published by dozens of leading media outlets worldwide leverage our global news and sourcing capabilities along with our strong relationships with the deal making community to ensure data accuracy and completeness.

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