Sustainable banking report features climate bonds as a new fixed income asset class
Posted on 19. Jul, 2010 by Sean Kidney in blog
In a chapter for a new IFR Intelligence Report on Sustainable Banking, Sean Kidney, Christopher Flensborg, Alex Veys and Bryn Jones argue that the nascent environmental theme bond market heralds the arrival of a major class of theme bonds (climate bonds), as institutional investors and governments devote capital to a product which both fulfils risk/reward expectations and signals their de-carbonisation efforts to their member and voter stakeholders. The potential is for a future market with notional issuance to compete with traditional fixed income sectors.
The book, Sustainable banking: Risk, reward and the future of finance, is published by IFR Market Intelligence, a ThomsonReuters company. > Download the Chapter | Buy the Report.
World’s first Green Cement Bond closes
Posted on 13. Jul, 2010 by Sean Kidney in blog
True! See for yourself. OK, it’s only $1 mil and backed by Lafarge and it’s a bit publicity stunt; but it’s an entertaining one.
The issuer is Novacem, a spin-out from Imperial College London that has developed a “carbon negative cement” that they claim will offer cost and performance parity with Portland cement.
(Thanks to Christoph Harwood for spotting it.)
A history lesson for Green Banks
Posted on 02. Jul, 2010 by Sean Kidney in blog
A discussion paper released today by the Climate Bonds Initiative reviews experiences with State infrastructure banks in Europe and the US. The paper says that there are a wide range of financial engineering options that a Green Infrastructure Bank could use to to leverage public funds to support an increased flow of private investment into clean energy and climate change mitigation projects.
Prepared by finance consultant Xavier Lecacheur, the report also says that private sector players are often supportive of State infrastructure banks and accept that public-backed schemes that leave a space for private sector initiative can be beneficial, as they plug a gap. > Download the paper.