Caffil sold the first bond from a new and enlarged group green, social and sustainability framework on Tuesday, a €750m five year green transaction that benefited from the scarcity of both its maturity and ESG nature, according to SFIL’s Gonzague Veillas.
ECB officials called for greater disclosure of all covered bonds’ climate-related risks at a European Covered Bond Council plenary last week, while speakers were sympathetic towards a flexible definition of green covered bonds as the EBA asked the industry whether it feels the asset class requires a dedicated framework.
The European Covered Bond Council is working on a definition of green covered bonds aimed at reflecting the distinct characteristics of the instrument to ensure its appropriate treatment in incoming regulations, and following a Green Bond Principles update deemed contradictory to its core feature by some.
Growth in sustainable covered bond issuance is expected to moderate this year after a doubling of such issuance in 2021, with constraints on appropriate assets holding back growth, and regulatory developments a mixed blessing for issuers hoping to tap into investor enthusiasm for such bonds.
Net zero ambitions abounded during the Finance Day of the COP 26 Presidency Programme in Glasgow on Wednesday, with a Mark Carney-led alliance touting a $130tn headline figure, but critics questioned whether such pledges are sufficient.
The European Union issued its first green bond to unprecedented demand yesterday (Tuesday), raising €12bn in the largest green bond ever, a 15 year deal that attracted over €135bn of orders, representing an endorsement of the Commission’s ESG direction.
Moody’s has raised its full-year forecast for sustainable bond issuance on the back of record volumes globally in the first half of the year, and now expects 2021 supply of labelled use-of-proceeds bonds and sustainability-linked bonds to approach $1tn.
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.