Green Loan Principles that will provide the first sustainability framework for the syndicated loan market were launched on Wednesday by the LMA and the APLMA, complementing the Green Bond Principles to support a market that could boost climate-related funding.
After pioneering issuers have led the way in creating a green bond market, the full array of debt instruments needs to be tapped to fund the fight against climate change, says the Climate Bonds Initiative’s Manuel Adamini. The recent growth of sovereign, structured and even synthetic deals suggests this is on the verge of happening.
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.
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.
Draft guidelines for a planned European energy efficient mortgage have been published for a market consultation today (Monday), ahead of the launch in June of a pilot scheme, which will collect data that could substantiate a correlation between energy efficiency and lower risk.
National Australia Bank (NAB) took an innovative approach to green securitisation when it sold a A$300m green tranche as part of a A$2bn residential mortgage backed security (RMBS) on 8 February, with low carbon buildings part of a wider pool of mortgages.
The first legislation relating to an EU sustainable finance taxonomy will come as early as this spring, according to Commission vice president Valdis Dombrovskis, who said today (Friday) that a green bond label will be part of its action plan and a green supporting factor is still on the cards.
The EU High-Level Expert Group (HLEG) on sustainable finance delivered a “manifesto for far-reaching change” in the form of its final recommendations to the European Commission today (Wednesday), with a call for an official EU Green Bond Standard to be introduced this year.
SpareBank 1 Bolgikreditt launched the largest single-tranche green bank bond outside China and the first green benchmark covered bond with residential mortgages on Tuesday, a EUR1bn deal made possible by taking building codes and years as a proxy for energy efficiency – a strategy that could be used by others.
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