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Global green bond partnership to accelerate issuance of bonds

The Global Green Bond Partnership (GGBP) was launched on Thursday at the Global Climate Action Summit and aims to support efforts of sub-national entities such as cities, states, and regions, corporations and private companies, and financial institutions to accelerate the issuance of green bonds.

The founding members of the GGBP include the World Bank, the International Finance Corporation (IFC), Amundi, the European Investment Bank, the Climate Bonds Initiative, Ceres, ICLEI – Local Governments for Sustainability, the Global Covenant of Mayors for Climate & Energy and the Low Emissions Development Strategies Global Partnership.

“In the past decade, green bonds have proven to be a real force in driving commercial financing into climate-smart investments and hold great promise for further scale up. IFC looks forward to participating in the Global Green Bond Partnership and collaborating with other pioneers to accelerate the issuance of green bonds and crowd in additional climate finance,” said Vikram Widge, global head, climate finance and policy at IFC.

The UNFCCC estimates that $1.5 trillion of financing needs to be mobilised every year to 2030 to fully implement the Paris Agreement.

Green bond market

The European Investment Bank and the World Bank pioneered the first green bonds, with EIB issuing the Climate Awareness Bond in 2007 and the World Bank issuing its first green bond in 2008. Read more: Green bonds explained | Exclusive interview with CoCT Kevin Jacoby

The green bond market continues to grow at a rapid pace, growing from the annual issuance of $3.4 billion in 2012 to $161 billion in 2017.

As governments and corporations alike recognise, the green bond market offers significant global opportunities to mobilise capital at scale for low carbon, climate resilient infrastructure and development efforts.

“The brown to green shift in corporate balance sheets and capex directions needs accelerated action from the world’s biggest banks, largest emitters and institutional investors. The international green bond market is now the platform for this large-scale shift, with the target of trillions in new capital mobilised towards climate adaptation and resilience, clean energy and green infrastructure,” said Sean Kidney, CEO of Climate Bonds Initiative.

A joint media statement explained that the members of GGBP will work together to scale green bond issuance primarily by sub-national entities and corporations through targeted technical assistance, capacity building, de-risking, investing, and underwriting support, as well as supporting the development of innovative funds and other financial vehicles to mobilise investor capital.

Scaling up green finance

“Scaling up green finance is crucial to tackle climate change and implement the Paris agreement. As the first and largest issuer to date the EIB recognises the key potential of green bonds to accelerate low carbon investment and enhance investor support,” said Jonathan Taylor, European Investment Bank Vice President responsible for climate action.

The partnership will coordinate with efforts such as IFC’s Green Cornerstone Bond Fund Support Program to complement the Amundi Planet Emerging Green One Fund and other targeted efforts to support the overall growth of the green bond market.

“Amundi, as a leading green manager and investor in the global clean energy transition, looks forward to working with Global Green Bond Partnership members to identify new opportunities to support the fight against global warming,” said Stanislas Pottier, Chief Responsible Investment Officer, Amundi.

Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.