Climate Bonds

We promote investment in projects and assets necessary for a rapid transition to a low carbon and climate resilient economy.

The strategy is to develop a large and liquid Green and Climate Bonds Market that will help drive down the cost of capital for climate projects in developed and emerging markets; to grow aggregation mechanisms for fragmented sectors; and to support governments seeking to tap debt capital markets.

Climate Bonds Initiative is an investor-focused not-for-profit. Our work therefore is an open source public good and falls into three workstreams.

1. Market intelligence

• Reporting on green bond market evolution

We produce a Green bonds: State of the Market report, quarterly highlights reports, regional and country-specific reports and updates. We track post-issuance reporting and green bond pricing in the primary market, green bond underwriter league tables and stock exchanges with green/sustainability bond segments. We issue thematic reports, e.g. on sectors and structures used in the market. We also produce guides to facilitate issuance.

A core network development is the Market blog, designed as both a journal of record for bond issuance and updates on investment news and research material to fixed income investment in climate solutions. We maintain a bond library for new issuers since early 2018.

• Sizing the climate bonds universe

To overcome the perception of a niche market and demonstrate the opportunities available to investors, the Climate Bonds Initiative undertakes an annual survey of bonds outstanding globally related to climate change. The 2018 report showed US$1.45tn outstanding (including US$389bn of green bonds). Each year the report is presented in seminars in multiple countries and via briefings for banks and investors.

• Demonstrating green infrastructure pipelines

Green infrastructure presents a huge investment opportunity globally, with an estimated US$100tn worth of climate-compatible infrastructure required between now and 2030 in order to meet Paris Agreement emissions reduction targets. The Green Infrastructure Investment Opportunity (GIIO) programme aims to identify and demonstrate green infrastructure investment opportunities around the world. We have published GIIO reports on Indonesia and Australia & New Zealand.

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2. Developing a trusted standard 

The Climate Bonds Standard and Certification Scheme is a FairTrade-like labeling scheme for bonds. It is designed as an easy-to-use tool for investors and governments that assists them in prioritising investments that truly contribute to addressing climate change. The Standard is a public good resource for the market.

• Climate Bonds Taxonomy is the backbone of the standard work – it defines investments that are part of low carbon economy.

The Climate Bonds Standard is overseen by a Board representing $32 billion of assets under management

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3. Providing policy models and advice

Rapid change at very large scale will depend on a close working relationship between government, finance and industry. The Climate Bonds Initiative is developing policy proposals for all three sectors, including:

• How to boost bank lending to renewables by adapting the $3 trillion covered bonds market to create renewable energy covered bonds.

• Delivering on the promise of large-scale energy efficiency (e.g. getting to 85% of housing stock within 10 years).

• Policy risk insurance for renewable energy bonds, to be provided by a consortium of governments.

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