Our team: Edward Morgan
Will we see an increased demand in investment in green bonds given growing awareness of the impact of climate change and contamination and this impact on consumer habits? Our clients are increasing exploring opportunities in the renewals sector.
A new handbook has been released by the International Capital Market Association containing a harmonized framework for impact reporting on green bonds (Handbook). We expect this to bring a greater conformity of product to meet increased demand.
Green bonds are bonds which allocate their proceeds to environmentally beneficial projects and in January 2014 a voluntary set of guidelines, the Green Bond Principles (GBP), were first published to help enhance the integrity and transparency of the green bond market, including through impact reporting.
The Handbook unites previously published harmonizing frameworks for impact reporting for some (but not all) categories of GBP eligible green projects under the GBP and seeks to enhance the usability of those frameworks and avoid repetition.
There are 16 core principles and recommendations for reporting contained in the Handbook which include:
The impact sector specific guidance and reporting metrics and the reporting templates cover: (1) Renewable Energy, (2) Energy Efficiency; (3) Sustainable Water and Wastewater Management; (4) Waste Management and Resource-Efficiency; (5) Clean Transportation; and (6) Green Buildings.