The use of renewable energy assets as covered bond collateral under a proposed Luxembourg framework would bring extra risks versus traditional collateral, according to Moody’s, but the rating agency highlights various mitigants and says the law is overall credit positive for funding such assets.
Green bonds backed by mortgages might seem a natural source of supply from banks. However, a lack of joined-up data is forcing banks to be creative in carving out pools of energy efficient loans. Neil Day explores the building blocks for a bigger market with ABN AMRO’s Joop Hessels.
The European Commission will in May propose a sustainable finance taxonomy that will provide the basis for EU labels for green bonds to be introduced in 2019, it announced today (Thursday), among measures including changes to fiduciary duty and an exploration of a “green supporting factor”.
The bank green bond market is primed to continue its rapid growth, according to S&P, with the rating agency highlighting the importance of reporting and transparency in achieving a top green score under its approach.