The Climate Bonds Initiative has released Version 3.0 of the international Climate Bonds Standard, a significant development for global green bond and loan markets.
Sean Kidney, CEO of Climate Bonds Initiative said, “The Climate Bonds Standard now underpins certification of over USD100 billion worth of green bonds and debt products around the world and is growing. Climate Bonds Certification has emerged as a universal adaptor for issuers and investors in both developed and emerging economies.”
“It’s a simple pathway to best practice that provides recognition and compatibility in multiple jurisdictions. Climate Bonds Standard Version 3.0 (Standard V3.0) strengthens disclosure and green definitions and is another step in the maturation of the green finance market that’s growing towards a trillion dollars in annual issuance.”
Climate Bonds Standard V3.0 is a major upgrade to the Climate Bonds Standard, designed to ensure compatibility with the new EU Green Bond Standard (GBS),the latest version of the Green Bond Principles (GBP), Green Loan Principles and recent market developments including guidelines adopted by India, ASEAN and Japan.
The new Standard V3.0 provides guidance for:
- Robust Green Bond Frameworks: Standard V3.0 provides issuers with detailed requirements for what their Green Bond Framework document must contain.
- Ongoing Reporting: Standard V3.0 reporting requirements are more clearly defined via a formal annual Update Report which covers Allocation, Eligibility and Impact Reporting.
- Expenditures & Debt Instruments Definitions: Standard V3.0 provides detailed definitions on which type of expenditures are eligible and an expansion in the list of debt instruments which can be Certified, including loans, sukuk, deposit products and other investments.
Climate Bonds Certification provides assurance for issuers and investors that a green debt product meets labelling requirements for major global jurisdictions, is science based and is aligned with the goals of the Paris Climate Agreement to limit warming to under 2 degrees. To date over $100bn of green investment has been certified under the Standard.
Recent certified issuance includes sovereign green bonds issued by the governments of Chile and the Netherlands, corporate debt from Porsche, and a 100-year green bond from SNCF.
Standard V3.0 aims to support the expansion of the green investment market – forecast to reach up to USD250bn of green debt issuance in 2019 and accelerate the mainstreaming of green bonds, green loans and other products via a simple label which investors can trust.
Alongside the Standard, the Climate Bonds Initiative works to expand green definitions for investments across the global economy that are in line with the goals of the Paris Agreement.