An overview of the market and how the oil and gas majors’ hesitant steps into renewables could turn into an offensive. The first three months of 2018 saw the issuance of c.€20bn self-labelled green bonds on the credit markets. In the last three months, the Kingdom of Belgium issued a €4.5bn green bond while the Republic of Poland and Indonesia issued €1bn respectively.
Aside from governments, oil and gas companies are trying to enter the renewable energy market too with Repsol being the only major green bond issuer. But still, we think the sector is a potential candidate.
We believe issuance for 2018 and upcoming years will remain strong, and the reason behind that is the sheer number of initiatives across the globe to promote green finance.
In March 2018, the UK government published its “Accelerating Green Finance” report which described the need for investments in clean energy and infrastructure. The document also looked at incentives for sterling issuers to issue green bonds and advocated the issuance of a UK government green bond of the same order as the French sovereign green bond (c.€10bn).
Following the initiatives of the Chinese government and organisations, Japan is ready to catch-up with its environment ministry willing to subsidise green bond costs, i.e., consultation and second opinion fees. The Japanese government would like to see Japanese green bond issuance doubling in 2018 compared with 2017. Last but not least, we want to mention the work at the European Union level with the recommendation of the establishment of an EU sustainability taxonomy, standards and labels among other things.