The Climate Bonds Initiative, in partnership with global bank HSBC, has just published the 2014 edition of its annual report Bonds and Climate Change: The State of the Market. The CBI claims to be the only organization in the world helping to accelerate the transition to a low-carbon economy by mobilising the largest capital market of all – the $80 trillion bond market – for climate change solutions. Its work aims to reduce market friction and improve risk differentiation for green investments.
The study finds:
- The total universe of bonds linked to key climate changes solutions stands at US$502.6bn, compared to last year’s estimate of $346bn.
- $35.8bn of the universe is made up of labelled green bonds issued by corporations and development banks.
- $236.6bn (47% of total) meets index filters around size, rating and currencies.
- Low carbon transport, notably rail, accounts for 71% of the total, followed by clean energy (15%) and climate finance (10%).
- By category, green bonds have been issued for transport ($358.4bn), energy ($74.7bn), finance ($50.1bn), buildings and industry ($13.5bn), agriculture and forestry ($4.2bn), waste and pollution ($1.4bn), and water ($266m).
- China remains the largest single issuing country due to the inclusion of China Railway Corp. which is one of the largest builders of new rail infrastructure in the world.
- Top green bond issuing countries are China ($164bn), UK ($58.5bn), US ($51bn), France ($49bn), Canada ($25bn), and South Korea ($24bn).
CBI claims that the growth in the Green Bonds market is part of an overarching trend towards increasing interest in environmental, social and governance issues across all asset classes.
The 12 page report, containing much more data about green bonds, is available at http://www.climatebonds.net/bonds-climate-change-2014. Watch for more coverage of green investments in an issue of Gallon Environment Letter later this year.