Embed Size (px)
Citation preview
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
GREEN BONDS: DEBT CAPITAL MARKETS AND THE LOW CARBON TRANSITION LENORA SUKI
HEAD OF SUSTAINABLE FINANCE PRODUCT STRATEGY
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
Electric Vehicles: development
and charging stations
The climate bond will fund….
Retrofitting 200 schools: energy
efficient buildings
Construction of energy efficient
buildings: social housing
New public green spaces:
roofs, walls, facades
Production of renewable
energy: solar panels
Alternative transport:
Cycling Plan
GREEN AND THEMATIC BONDS LEVERAGE CAPITAL FOR SUSTAINABLE AND EQUITABLE ECONOMIES
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
PARIS IS NOT ALONE… SSA ISSUERS HAVE BUILT THE GREEN BONDS MARKET
230 unique SSAs and municipal issuers…
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
CORPORATE ISSUANCE IS RAMPING UP
Corporate issuers in the green bonds market
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
5
$3 tn target by COP21
$8 tn in assets to disclose footprints
$100 bn target by COP21
PDC oversees $230 bn in AUM
THE MOVEMENT FOR DECARBONIZATION AND DISCLOSURE ACROSS STAKEHOLDERS IS GROWING
$24 tn in AUM calling for an agreement
on climate change
154 companies with $4 tn in revenues pledge
environmental goals
$22 tn investor group engaging with over
1,300 companies
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
27%
NY – 73%
DU - 11%
SUSTAINABLE AND RESPONSIBLE INVESTMENT IS
ACCELERATING BUT STILL LARGELY EQUITY
Sources: Principles for Responsible Investment, Bloomberg
Principles for Responsible Investment
Funds With Sustainable
Investment Strategies
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
BLOOMBERG USER GROWTH ILLUSTRATES GROWING
INTEREST IN SUSTAINABLE INVESTMENT
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
27%
NY – 73%
DU - 11%
Source: Bloomberg New Energy Finance (BNEF)
CLEAN ENERGY INVESTMENTS HAVE LEVELED AT ~$300 BN/YR SINCE 2011
* Estimated 2015 figure includes end of year projected R&D estimates and EST asset finance
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
27%
NY – 73%
DU - 11%
Source: Bloomberg, Bloomberg New Energy Finance (BNEF)
BOND ISSUANCE FINANCES INCREASING SHARE OF CLEAN ENERGY INVESTMENTS, REFINANCING
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
GREEN BONDS HAVE BEEN THE MOST IMPORTANT VEHICLE FOR THAT GROWTH
Source: Bloomberg, Bloomberg New Energy Finance (BNEF)
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
NOT ALL PUBLIC DEBT SEGMENTS FINANCING CLEAN ENERGY ARE THE SAME
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
STANDARDS ARE BUILDING EXPECTATIONS OF TRANSPARENCY AND SUSTAINABILITY PERFORMANCE
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
27%
NY – 73%
DU - 11%
ACHIEVING GOALS OF COP 21 WILL REQUIRE SUSTAINABLE FINANCE, ESPECIALLY GREEN BONDS
• Capital providers are responding with sustainable finance innovation (e.g. green bonds, yieldcos, funds)
G7 decarbonization pledge already made
• Supranationals are leveraging green bonds for North-South resource distribution
Differentiated, distinct contributions key to success
• South-South Climate Cooperation Fund, Green Investment Banks can be green bond issuers
More climate finance funds and vehicles
• Green bonds market is headed toward more transparency and standards
Quantifiable, measurable, reportable, verifiable targets
>>>>>>>>>>>>>>
BLOOMBERG AND GREEN BONDS
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
BLOOMBERG PROMOTES TRANSPARENCY AND ACTIONABLE INFORMATION
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
BNEF<GO>
BNEF ANALYZES GREEN BONDS ISSUANCE, THEMES AND MARKET MAKERS
Source: Bloomberg
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
27%
NY – 73%
DU - 11%
NEWS AND PREDEFINED PORTFOLIO SEARCHES GIVE UP-TO-THE-MINUTE ACCESS
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
GRANTMAKING FOR STANDARDS AND SUSTAINABILITY BUILDS THE ECOSYSTEM
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
TRANSPARENCY AND STANDARDS DRIVE ADOPTION OF BEST PRACTICE FOR CORPORATES AND INVESTORS
Innovation
Initial Activity
Best practices identified
Benchmarks established
Mainstream application
Financial Analysis /
Integration
“Derivative” Financial
Instruments
Developed Early stage
Standards-
Setting Phase
Measurement / Management
Ad
op
tio
n
Standards evolution
Information / Analytics
Today
Standardization /
normalization
begins
Quality,
comparable
data emerges
Sustainability risk
/opportunity for
Companies and
Investors
19
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
2 0
BLOOMBERG HAS ADVANCED TRANSPARENCY AND MARKET CREATION ACROSS BOND MARKETS BEFORE
>>>>>>>>>>>>>>
MARKET FRONTIERS AND GROWTH
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
THE CURRENT TREND IN CLEAN ENERGY INVESTMENT SEES A SHIFT TO LARGE SCALE RENEWABLES
Source: Bloomberg New Energy Finance
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
CLEAN ENERGY CAPACITY IN EMERGING AND DEVELOPING MARKETS IS GROWING RAPIDLY
China Gross Annual Capacity
Additions and Retirements
New Clean Energy Capacity
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
AGGREGATION AND NON-ENERGY CO-BENEFITS WILL DELIVER ANOTHER PUSH
Energy efficiency and distributed generation
• Residential, commercial, hospitality, health care, industrial, MUSH, municipal equipment
• Distributed assets with heterogeneous cash flows, contracts and structures
• Data challenges, baseline and measurement
• Need for a sophisticated aggregator and a pool of capital to finance
• Challenge of public + private benefit, social co-benefits => guarantees, PPPs, tax incentives
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
° °
ASPIRATIONAL PARTING THOUGHTS
Debt and Financial “Innovation”
Small investments won’t get us to the quantum of capital we need to achieve
climate goals. Tapping global debt capital markets is critical.
New Investment
A very small proportion of existing green bonds issuance is for new projects. “We
push issuers now on the new investment part of the green bonds.” – Stephan
Bonte, Standish Mellon Asset Management
Quality of Disclosure
Bloomberg and others are creating new transparency and evaluation screens.
Impact Investment
49% of investors say that impact investment will be one of the predominant
themes of their future investment plans.
The Future of Green Bonds
“In the future, all bonds should be green.” – Suzanne Buchta, Bank of America
Merrill Lynch
