Words by Rebecca Cooke / Source: Trillion Fund
Yesterday it was announced that a further twelve banks would be committing to the Green Bond Principles in a move to encourage more transparency and disclosure in the green bonds market.
The latest twelve banks to agree to the Principles now means that there are 25 banks signed up to the deal, giving hope that the total could breach the 100 mark by the UN Secretary General’s Climate Change Summit on September 23 this year.
The Green Bond Principles were initially published in January by thirteen banks, which agreed to rules on disclosing, managing and reporting to investors and issuers what happens to the capital in a Green Bond. The principles also help to accurately evaluate the environmental impacts of green bond investment outlined in this governance framework.
The original Principles were set up by four founding multi-national banks, Bank of America Merrill Lynch, Citi, Crédit Agricole CIB, and JPMorgan Chase, with a further nine banks signing up to the principles as the first signatories.
The latest signatories are: Barclays, BMO Financial Group, Credit Suisse AG, DNB, DZ BANK AG, ING, Lloyds Bank, Mitsubishi UFJ Securities, Nomura, RBC Capital Markets, Santander, and Société Générale.
The inception of the Green Bond Principles was welcomed by leading ethical investing figures including Climate Bonds Initiative chief executive Sean Kidney who said: “The banks behind the Principles should be applauded for working together to ensure standard practices in the issuance of green bonds, in particular around transparency for investors and reporting on the use of proceeds.”
He added: “Common standards are essential for growing bond markets and preventing greenwashing scandals that would damage the reputation of bond issuers and investors alike. The easier it is for investors to compare apples with apples, the faster this market will grow. This is especially the case with corporate green bonds, which will be the big growth area.”
Ethical investing has gathered momentum in mainstream banking over recent years with more emphasis being importance being placed on transparency in their investments.
The news of the latest Green Bond Principle signatories comes after fossil fuel giant Exxon Mobil agreed last month to disclose their carbon asset risk after coming under pressure from investors.
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