Search Climate Insights Directory

KPMG India provided limited assurance to Power Finance Corporation Limited, concluding that its Green Bond Framework conforms in all material respects to the pre-issuance requirements of the Climate Bonds Standard Version 2.1. The assessment covered the selection of nominated projects and assets, internal processes and controls, and reporting prior to issuance.

First Environment, Inc. conducted a pre-issuance verification of the LACMTA's Proposition A First Tier Senior Sales Tax Revenue Bonds, Series 2017-A (Green Bonds) between August 14 and October 2, 2017. The verification assessed the bonds against the Climate Bonds Standard Version 2.1 and the Low Carbon Land Transport sector criteria Version 1.0. The verifier concluded that the bonds, intended to fund public transport rail infrastructure, conform in all material respects to the required standards.

The report identifies a $895 billion climate-aligned bond universe, consisting of $221 billion in labelled green bonds and $674 billion in unlabelled bonds from pure-play issuers. Transport and energy are the dominant themes, with rail infrastructure being a primary driver. The document highlights the growing role of sovereign and sub-sovereign issuers, particularly in China and the US, and advocates for the green bond market to reach $1 trillion in annual issuance by 2020 to meet Paris Agreement targets.

The report identifies a $895 billion climate-aligned bond universe as of mid-2017, consisting of $221 billion in labelled green bonds and $674 billion in unlabelled bonds from pure-play issuers. Transport and energy are the dominant themes, with China Railway Corp being the largest single issuer. The document highlights the growing importance of municipal and sovereign green bonds, particularly in the US and Europe, and provides a detailed analysis of Brazil's potential to expand its green finance market to meet its Paris Agreement targets. It concludes by advocating for a global green bond issuance target of $1 trillion per year by 2020.

The report identifies a $895 billion universe of climate-aligned bonds, including $221 billion in labeled green bonds. It highlights the dominance of the transport and energy sectors and the critical role of sovereign and sub-sovereign issuers, particularly in China and the US. The document argues for a massive acceleration of green bond issuance to reach $1 trillion annually by 2020 to support Nationally Determined Contributions (NDCs).

The report details the expansion of China's green bond market in H1 2017, highlighting a 33.6% year-on-year growth in issuance and a shift toward more diverse issuers. It examines the alignment of these bonds with international standards, the impact of new domestic policies, and the potential for green municipal bonds to drive local low-carbon transitions.

The Chinese green bond market grew by 33.6% in the first half of 2017, reaching a total issuance of $11.52 billion. The market saw a diversification of issuers, with non-financial enterprises and policy banks increasing their share as commercial bank dominance declined. While most bonds maintain high credit ratings and align with both domestic and international definitions, the report highlights a push toward standardization and the potential for growth in green municipal bonds.

The report finds that while 74% of analyzed green bonds provide some public reporting, there is significant inconsistency in quality and content. Reporting is generally more comprehensive for larger issuers and those in European markets, whereas U.S. municipalities and private placements show lower compliance. While impact reporting is increasing, it lacks standardized metrics, and over 70% of bonds fail to clearly disclose the proportion of funds used for refinancing versus new projects.

KPMG conducted a limited assurance engagement for the State Bank of India to verify that its Green Bond Framework aligns with the Climate Bonds Standard Version 2.1. The review covered project selection, internal controls, and reporting. KPMG concluded that the framework conforms in all material respects to the pre-issuance requirements.

First Environment, Inc. conducted a pre-issuance verification of BART's General Obligation Bonds (Election of 2016 2017 Series A and Election of 2004 2017 Refunding Series E) between March 27 and April 24, 2017. The verification assessed whether the bonds, intended to fund electrified public transport infrastructure, met the Climate Bonds Standard Version 2.1 and the Low Carbon Land Transport sector criteria Version 1.0. The verifier concluded that the bonds conformed in all material respects to these standards, providing a limited level of assurance based on ISAE 3000 and ISO 14065 principles.

The document argues that green securitisation—aggregating small-scale low-carbon assets into tradable securities—can unlock significant institutional capital for the energy transition in Europe. It identifies barriers such as a lack of standardised contracts, limited asset volumes per lender, and low credit ratings for new asset classes. To overcome these, the authors propose a public sector agenda including the creation of green asset guidelines, the development of standardised loan contracts, the establishment of financial warehouses, and the provision of credit enhancements and cornerstone investments by development banks and the European Central Bank.

The document highlights 2016 as a pivotal year for green bonds, noting the emergence of sovereign green bonds in Poland and France and the increasing use of these instruments to fund Nationally Determined Contributions (NDCs). It argues that a green debt market of at least $1 trillion per year is necessary by 2020 to meet low-carbon infrastructure needs. Key policy tools identified include credit enhancement, tax incentives, and the establishment of official national guidelines, with specific examples of initiatives in China, India, Brazil, and Mexico.

The document examines the growth and potential of green asset-backed securities (ABS), which convert pools of non-liquid carbon-saving assets into tradable securities. It highlights that green ABS accounted for approximately USD 5 billion (6% market share) of green securities issued in 2016, growing from USD 1.9 billion in 2014. The OECD estimates that annual issuance for renewable energy, energy efficiency, and low-emission vehicles could reach USD 280-380 billion by 2035. The briefing identifies key benefits, such as the ability to bundle small projects to reach bond market volumes and the potential for lower capital costs compared to bank financing. It also addresses risks stemming from the 2008 financial crisis and recommends public sector interventions, including the development of uniform 'green' asset definitions, financial support for data collection, and guarantees for junior or mezzanine tranches to attract institutional investors.

The document explains how green covered bonds, which utilize a dual recourse structure and dedicated asset pools, can provide banks with cheaper, long-term funding for low carbon projects. It highlights early examples like BerlinHyp's green Pfandbrief and the Bank of China's dual recourse bond, while arguing that standardizing green asset definitions and expanding legal frameworks to include renewable energy leases would scale the market.

The document explains how green securitisation transforms pools of illiquid low-carbon assets into tradable securities, improving access to and lowering the cost of capital for small-scale projects. It notes that green Asset-Backed Securities (ABS) grew to USD 5bn in 2016 and could reach USD 280-380bn annually by 2035. The author recommends public sector interventions, such as providing guarantees for junior tranches and supporting the standardisation of green loan contracts, to mitigate risks and drive market growth.

The report highlights that China became the global leader in green bond issuance in 2016, driven by policy support from the People's Bank of China (PBOC) and the National Development and Reform Commission (NDRC). In 2016, Chinese issuers issued approximately $36.2 billion in green bonds, accounting for 39% of global issuance. While the market grew rapidly, the report notes discrepancies between domestic and international green definitions, particularly regarding the use of proceeds for refinancing and the inclusion of clean coal projects. Commercial banks were the dominant issuers, and clean energy was the most targeted sector. The document recommends unifying green bond standards and enhancing disclosure to attract more international investors.

The document lists various entities awarded for pioneering green bond activities in 2016. Key achievements include the first green sovereign bond from Poland, the largest overall issuer (Shanghai Pudong Development Bank), and the first green bonds from several countries including Colombia, Costa Rica, Morocco, and the Philippines. It also recognizes the People's Bank of China for regulation and CICERO for its 'Shades of green' assessment model.

The green bond market showed strong growth in Q3 2017, with USD 27.7bn issued, making it the second largest quarter ever. Emerging markets, particularly Mexico and India, saw significant activity, while the market expanded geographically into Malaysia and Lithuania. There is a growing trend toward external verification of green bond frameworks to increase transparency and investor confidence.

In Q3 2017, the green bond market saw USD 27.7bn in issuance, marking the second largest quarter ever. Emerging markets, particularly Mexico and India, showed significant growth, while the market saw an increasing trend toward external verification of green bond frameworks. The report also highlights the emergence of green Sukuk in Malaysia and the exclusion of USD 7.5bn in labelled bonds that did not meet the Climate Bonds Initiative's strict taxonomy.

The document describes two methods for establishing building proxies for Climate Bonds Certification: benchmarking against local market emissions performance and analyzing the proportion of total ratings or labels awarded. The first method uses the top 15% of energy-efficient buildings to create an emissions performance trajectory that declines to zero by 2050, requiring proxies to have 'sunset dates' when they no longer meet the tightening threshold. The second method is used when emissions data is lacking, requiring evidence that a specific rating or label falls within the top 15% of all awards under a representative scheme, with these proxies reviewed every two years.