The first sustainability-linked bond (SLB) from a bank suggests the instrument can be a viable and attractive option for financial institutions committed to reaching climate-related and other targets. However, questions remain over its regulatory treatment, while data could pose challenges.
Jyske Realkredit published the first Energy Efficient Mortgage (EEM) Label harmonised disclosure template yesterday (Thursday), with the EMF-ECBC hailing the move as supportive of preferential treatment for green mortgages as the EBA and European Commission move ahead with regulation.
From oil and gas companies escaping exclusion via sustainability-linked bonds, to sovereigns offering greater liquidity via green bonds, Actiam head of fixed income Mehdi Abdi is heartened by key developments in sustainable bonds – although issuers may find him increasingly picky.
The first update to the Green Bond Principles (GBP) since 2018 was issued on Thursday, including formalising recommendations that bond frameworks and external reviews be used, and a recommendation of heightened transparency around issuer-level sustainability aims.
Eika Boligkreditt sold its first green bond on Tuesday, with the green element and a defensive approach contributing to a successful outcome in an uncertain market, according to an official at the Norwegian issuer, whose framework tackles taxonomy alignment and reflects green progress in the Eika Alliance.
Belfius inaugurated a green bond framework last Tuesday with a €500m six year senior non-preferred (SNP) issue and achieved a “greenium” of several basis points, according to lead bankers, as banks took advantage of strong demand for green bonds to tap the euro market for SNP and Tier 2.
The green bond market urgently needs a common framework for use of proceeds and impact reporting, according to a Climate Bonds Initiative (CBI) survey, which found the nature of reporting so far to be “totally fragmented”, even if post-issuance reporting itself is now widespread.