January 13, 2014 / 3:42 PM / 5 years ago

Market welcomes Green bond principles

LONDON, Jan 13 (IFR) - A set of principles for the issuance of Green bonds was published on Monday, after months of work between issuers, investors and environmental groups.

The voluntary guidelines, published via the website of non-profit corporate advisory organisation Ceres, aim to clarify the approach for the issuance of environmentally-responsible debt products, which has ramped up over the last year.

A consortium of investment banks - Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank, JPMorgan Chase, BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB - all announced their support for the initiative on Monday.

“We are excited about continued developments in the area of Green bonds as an important mechanism through which we can help harness the deep and liquid fixed income capital base for environmentally beneficial solutions,” said Martin Weber, head of SSA and growth markets origination at Goldman Sachs.

While public sector issuers like the World Bank have been issuing Green bonds for many years, the sector reached a new milestone in 2013 when the International Finance Corporation issued the first ever USD1bn-sized benchmark bond in February.

In total, over USD10bn of Green bonds were issued in 2013, including a record-breaking EUR1.4bn issue from French power group EDF and a USD500m issue from Bank of America Merrill Lynch, both in November.

The Green Bond Principles suggest process for designating, disclosing, managing and reporting on the proceeds of a Green Bond.

They are designed to provide issuers with guidance on the key components involved in launching a Green Bond, to aid investors by ensuring the availability of information necessary to evaluate the environmental impact of their Green Bond investments, and to assist underwriters by moving the market towards standard disclosures which facilitate transactions. (Reporting by John Geddie, Editing by Helene Durand, Julian Baker)

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