Climate-themed bond issues are showing strong year-over-year growth

gotrainSean Kidney, the man of action behind the Climate Bonds Initiative, has just released the “2013 review of Bonds and Climate Change” report in collaboration with HSBC Climate Change Centre of Excellence. In a nutshell, the report highlights some encouraging trends:
  • The total universe of bonds in the world now linked to climate themes amount to $346 billion, about double last year’s estimate;
  • About $74 billion in new climate-themed bonds were issued in 2012, a year-over-year increase of 25 per cent;
  • China leads the pack, accounting for $127 billion. The U.K. and France come in at No. 2 and No. 3;
  • The funds raised through the bond issues are going mostly to rail projects, considered a low-carbon transportation alternative and accounting for 75 per cent of the total. Clean energy is second, followed by climate finance.
Nick Robins, director at the HSBC Climate Change Centre of Excellence, called the growth impressive. “We believe that bonds will play an increasingly critical role in financing the substantial scale-up in low-carbon infrastructure that the world economy urgently requires,” he said. Kidney, meanwhile, expects further expansion of interest in climate-themed bonds coming from multilateral, municipal and corporate issuers. “We also expect increasing demand from the $21 trillion of institutional investors aligned with the new Global Investor Coalition on Climate Change.”

2 thoughts on “Climate-themed bond issues are showing strong year-over-year growth”

  1. Ontario has it’s own ‘solar bond’ – up to $100,000 per investor, 5 year term, 5% return per annum. As SolarShare ramps up with over $15million worth of new solar projects in the province, they are releasing at minimum another $3 million worth of bonds to bring community equity in the projects up to 30%.

    If you’re interested in investing in solar with low risk and a 5% return, and you live in Ontario, this is a great bet. www (dot) solarbonds (dot) ca. AGM this week too!

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