New Delhi (ABC Live): New principles on the development and issuance of green bonds have been drawn up by a group of large investment banks. Bank of America Merrill Lynch, Citi, Crédit Agricole CIB and JPMorgan drafted the new framework, which guides disclosing, managing and reporting on the proceeds of a green bond.
Green bonds issued by banks and corporates are proving popular with firms seeking socially responsible investments, recent figures show. High issuance in November 2013 is reported to have doubled the total raised in 2013 to nearly $10bn and positioned the market for further growth.
The new steps are set to provide issuers with guidance on the key components involved in launching a green bond and aid investors evaluating the environmental impact of their investments.
“The development of a robust and liquid market for green bonds is an important progression for debt markets,” says Suzanne Buchta, global co-head of Green Debt Capital Markets at BofA Merrill. “In co-authoring these principles we attempt to help standardize the product and we hope to catalyse investment into environmentally sustainable projects, something to which our firm is very committed.”
Tanguy Claquin, managing director at Crédit Agricole CIB adds: “We are very pleased to have co-authored and announced the establishment of the Green Bond Principles. This is an important first step towards a more coherent approach to the market of Green and Sustainability Bonds, which will ultimately increase its attractiveness for investors thus encouraging investments into sustainability projects.”
BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB have all backed the principles.
The four banks that drafted the framework are set to propose a governance process that will allow for stakeholder input into the guidelines.