INSIGHTS
What is a Green Bond?
Green Bonds are any type of bond instrument where the proceeds will be exclusively applied to finance or re-finance, in part or in full, new and/or existing eligible Green Projects and which are aligned with the four core components of the International Capital Markets Association’s “Green Bond Principles”.
The Green Bond Principles
The Green Bond Principles (GBP) are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond. The GBP are intended for broad use by the market:
they provide issuers with guidance on the key components involved in launching a credible Green Bond;
they aid investors by promoting availability of information necessary to evaluate the environmental impact of their Green Bond investments; and
they assist underwriters by moving the market towards expected disclosures that will facilitate transactions.
The GBP recommend a clear process and disclosure for issuers, which investors, banks, underwriters, placement agents and others may use to understand the characteristics of any given Green Bond. The GBP emphasize the required transparency, accuracy and integrity of information that will be disclosed and reported by issuers to stakeholders.
For more information, visit ICMA Green Bond Principles website here.
Growth in Global Demand for Green Bonds
Green Bond market is over $3,361 Billion (USD) today¹
Green Bond market forecast to grow to over $1.9T in 2021
Estimated to be over $5 Trillion by 2035 (13% CAGR)
Source: Environmental Finance Bond Database – ¹ Includes Green, Social and Sustainability Bonds (May 2023).
Transition to Renewable Energy
Solar generates 202,256 GWh/yr in North America today (2023)
Solar is forecast to generate 1,735,764 GWh/yr in NA by 2050
Solar is forecast to grow 22% CAGR in NA over next five (5) years
Sources: DNV GL - Energy Transition Outlook Report (2022); SEIA – Solar Energy Industries Association
