Carbon Disclosure Project joins international Climate Bonds Standards Board

Climate Bonds Initiative Chair Sean Kidney announced in London today that the Carbon Disclosure Project is joining the Climate Bond Standards Board, supervising a program to provide investors and governments with an easy way to assess the integrity of environmental claims for green bonds.

Mr Kidney said: “According to the International Energy Agency we need at least a trillion dollars a year to be flowing into low-carbon industries if we’re to avert catastrophic climate change. That money will come largely from bond markets. We need to ensure it’s invested properly.”

The Carbon Disclosure Project is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. It acts on behalf of 551 institutional investors, holding US$71 trillion in assets under management.

Nigel Topping of the Carbon Disclosure Project said: "It is absolutely vital that governments and investors support a rational response to climate change by making very significant funds available to achieve emissions reductions. The Climate Bonds Initiative is playing a crucial role in advancing standards that will unleash the power of logical investment, sooner rather than later."

Mr Kidney: “Standards will provide a multi-country tool for investors and governments to assess the integrity of green investments and to preference them. It will support liquidity with green portfolios, essential for investors today.”

Growing this “green debt” market will provide institutional investors with opportunities to switch from carbon intensive to low-carbon investments – and fuel the growth of the low-carbon economy.

Funds under management by global bond traders reached $105 trillion in 2010. Last year over $6 trillion of new bonds were issued.

Theoretically, climate change-related bonds could be issued each year up to a level of $0.5 trillion for 20 years and still not exhaust the capacity of the global market.

The Carbon Disclosure Project will be one of a group of institutional investors and NGOs that make up the Climate Bond Standards Board. According to Mr Kidney, the first standard will be released within weeks.