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Global Green Bond Partnership launched at Global Climate Action Summit

The Global Green Bond Partnership (GGBP) has been launched at the Global Climate Action Summit taking place in San Francisco this week.

The new partnership is intended to support efforts of sub-national entities such as cities, states, and regions, corporations and private companies, and financial institutions to accelerate the issuance of green bonds.

The founding members of the Global Green Bond Partnership GGBP include the World Bank, IFC – a member of the World Bank Group, Amundi,  European Investment Bank, Climate Bonds Initiative, Ceres, ICLEI – Local Governments for Sustainability, Global Covenant of Mayors for Climate & Energy (GCoM) and the Low Emissions Development Strategies Global Partnership (LEDS GP).

Commenting on the launch, Vikram Widge, Global Head, Climate Finance and Policy at the International Finance Corporation,  said:

“In the past decade green bonds have proven to be a real force in driving commercial financing into climate-smart investments and hold great promise for further scale up. IFC looks forward to participating in the Global Green Bond Partnership and collaborating with other pioneers to accelerate the issuance of green bonds and crowd in additional climate finance,”

The UNFCCC estimates that USD $1.5 trillion of financing needs to be mobilized every year to 2030 to fully implement the Paris Agreement. The European Investment Bank and the World Bank pioneered the first green bonds, with EIB issuing the Climate Awareness Bond in 2007 and the World Bank issuing its first green bond in 2008.

The green bond market is continuing to grow at a rapid pace, growing from annual issuance of USD $3.4 billion in 2012 to USD $161 billion in 2017.  Governments and corporations alike recognize that the market offers significant global opportunities to mobilize capital at scale for low carbon, climate resilient infrastructure and development efforts.

According to Sean Kidney, CEO, Climate Bonds Initiative, the brown to green shift in corporate balance sheets and capex directions needs accelerated action from the world’s biggest banks, largest emitters and institutional investors. The international green bond market is now the platform for this large scale shift, with the target of trillions in new capital mobilised towards climate adaptation and resilience, clean energy and green infrastructure,” he added.

Jonathan Taylor, European Investment Bank Vice President responsible for climate action agreed that scaling up green finance is crucial to tackle climate change and implement the Paris agreement, commenting:

“ As the first and largest issuer to date the EIB recognises the key potential of green bonds to accelerate low carbon investment and enhance investor support. As the EU Bank we welcome the new Global Green Bond Partnership that will tackle barriers to green bond issuance. Enabling green bonds to be issued for the first time by new public and private partners, including in emerging and developing economies, will allow even more eligible projects to benefit.”

The Partnership will coordinate with efforts such as IFC’s Green Cornerstone Bond Fund Support Program to complement the Amundi Planet Emerging Green One Fund  and other targeted efforts to support the overall growth of the green bond market.

Additionally, the GGBP members intend to work together on the development of a Green Bonds Readiness Framework/Toolkit for potential issuers, designed primarily for sub-national entities and corporations, that will enable them to rapidly assess their readiness to issue green bonds and identify key gaps and barriers to issuance.

The GGBP will also collaborate among its members to advance coordinated provision of technical assistance and capacity building activities across the member’s respective green bond activities and areas of expertise.

“Amundi, as a leading green manager and investor in the global clean energy transition, looks forward to working with Global Green Bond Partnership members to identify new opportunities to support the fight against global warming,” said Stanislas Pottier, Chief Responsible Investment Officer, Amundi.

In addition, GGBP members will seek to engage with and provide technical assistance to Signatories of the Green Bond Pledge(5) (GB Pledge) to assist the development process around inaugural green issuance.

The LEDS GP, a global peer-to-peer exchange network, will serve as the interim secretariat of the Global Green Bond Partnership. Members will work together to identify concrete outcomes and milestones for the partnership and hold at least one joint outreach event by the end of 2018.

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