The rapidly growing green bonds market has been given a further boost this week by the launch of a €2.6bn issuance from ING Group, which the global banking giant claims is the largest transaction ever certified under the Climate Bonds Standard certification.
The issuance, which is also the largest green bond deal yet from a European bank, comprise a €1.5bn 12-year tranche and a $1.25bn seven-year tranche issued by ING’s Holdco. Both issuances were oversubscribed, it said, with final books growing to just under €4bn and $3bn respectively.
The green bonds – ING’s second ever green bonds deal – were certified under the Wind, Solar, Marine Renewables (Offshore Wind) and Low Carbon Buildings (Residential and Commercial) criteria of the Climate Bonds Standard.
ING’s head of sustainable market, Han Biemans, said climate change was an “unparalleled challenge for our world” and that the bonds issuance formed part of the firm’s efforts to become the industry leader in sustainable finance.
“Issuing green bonds is part of our corporate response to meeting the goals of the Paris Agreement, supporting the strong growth of our Sustainable Finance portfolio and demonstrating our commitment to sustainability and sustainable finance,” he said. “Climate Bonds Certification signals to the market and both institutional and retail investors that we support best practice and robust standards in green finance.”
Manuel Adamini, head of investor engagement at the Climate Bonds Initiative, also welcomed the announcement as a “pointer for other banks still considering their initial green issuance.”
“Facing serious climate impacts from being headquartered in a country for which sea level rise is extraordinarily threatening, ING as a repeat green issuer is demonstrating the financial leadership that banks and corporates need to emulate if we are to accelerate climate-based investment and low carbon transition,” he said.
Separately, the Climate Bonds Standard group has launched a new Adaptation and Resilience Expert Group (AREG) aimed at determining a set of guiding principles to help define climate resilient assets and bonds, with a view to their future inclusion in its green bonds certification scheme.
Comprised of 33 leading experts on adaptation and resilience from academia, non-profits, science and public and private sectors, the AREG’s goal is “to strengthen consideration of science-based resilience and adaption factors for green bond and debt-based investments where issuers are seeking Climate Bonds Certification,” it said.
Meanwhile, the Institutional Investors Group on Climate Change (IIGCC) has this week published a new guide to “close the climate risk blind spot” by helping to steer investors through the process of climate scenario analysis.
Encouraging investors to undertake scenario analysis was one of the key recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) that were released last year, and the IIGCC – which boasts more than 160 members worth over €21tr in assets under management – hopes its new guide can help address the ‘knowledge gap’ surrounding the TCFDs. Stephanie Pfeifer, CEO of the IIGCC, said:
“Many benefits of scenario analysis for investors come through undertaking the process, experimenting with methodologies and learning about the ways in which climate change drives financial impacts. For some investors the exercise can affect strategic asset allocation, for others it is about evolving their understanding of risk and opportunity for parts of their portfolio.”
Source BusinessGreen