Figueres: infrastructure bonds should be green bonds

Channels: Green Bonds

Companies: Climate Bonds Initiative, Ceres, CDP, C40, Citizens Climate Lobby, California Governor's Office, California Treasurer's Office, Global Optimism, NRDC, Planet Pledge, The Climate Group

People: Christiana Figueres, Patricia Espinosa, Sean Kidney

[UPDATED ON 21/3/18 WITH DETAILS OF INVESTOR PLEDGE]

Former UN climate chief Christiana Figueres issued a rallying call for cities, governments and large companies to issue green bonds to finance their infrastructure projects, as she seeks to shift the market's growth into a higher gear.

A new initiative, supported by numerous high-profile NGOs including her own Mission 2020 initiative, urges cities, governments and companies to sign a 'Green Bond Pledge', which would see them commit that when they issue bonds to finance infrastructure, they will label them green "whenever applicable".

The pledge reads: "We pledge to support this goal by establishing a green bonds strategy that will finance infrastructure and capital projects that meets the challenges of climate change while transforming our community into a competitive, prosperous and productive economy."

Figueres announced the initiative at a Climate Bonds Initiative conference in London, marking a further focus on the green bond market as a means to start ramping up climate finance.

Mission 2020, of which she is convenor, has already called for the green bond market to be increased 10 fold by 2020, compared with the $93 billion in 2016. At the conference she said green bond issuance needs to hit $1 trillion a year by 2020.

Figueres told delegates that all infrastructure built from now on - from transport, to energy to buildings - needs to be climate resilient and low-carbon. She added that "60% of all urban space we are going to need for the next century doesn't even exist yet", representing a huge opportunity. The majority of this will be in emerging markets, she added.

More than a dozen organisations from around the globe have helped to develop the pledge, including the Climate Bonds Initiative, Ceres, CDP, C40, Citizens Climate Lobby, California Governor's Office, California Treasurer's Office, Global Optimism, NRDC, Planet Pledge and The Climate Group.

Institutional investors will also be urged to sign the pledge. An investor statement coordinated by Ceres says: "We recognise that the growth of the international green bonds market provides a useful mechanism to finance solutions to climate change. As investors, we believe that green bonds and other green asset classes represent an investment opportunity to fulfill our fiduciary duty to clients and beneficiaries in a responsible and sustainable manner."

Figueres said in a statement: "When green investments move from business plans into budgets and balance sheets a wealth of opportunity will be unlocked across the value chain. Organisations committing to the Green Bond Pledge will benefit from these opportunities and help the necessary acceleration of capital flows - before 2020 - to deliver a sustainable future for everyone."

Patricia Espinosa, current UN climate chief and a Global Climate Action Summit co-chair, said: "I warmly welcome the Pledge as one among many inspiring new initiatives that will launch climate action in 2018 to the next level of ambition."

Sean Kidney, CEO Climate Bonds Initiative, added: "The Green Bond Pledge will become the basis for cities and corporates to reorient the long term investment and capital expenditure decisions on their balance sheets to address the unavoidable environmental and climate conditions of tomorrow."

For more information, go to: https://www.greenbondpledge.com/

The Green Bond Pledge - March 2018
Issuer Pledge:  Agencies, Government and Companies

We agree that all infrastructure and capital projects will need to be climate resilient and where relevant, support the reduction of greenhouse gas emissions.

We welcome the role that green bonds can play in helping to achieve the financing of that infrastructure.  

As a signatory to this pledge, we support the rapid growth of a green bonds market, consistent with global best practices that can meet the financing needs we face and issue, whenever applicable, bonds for infrastructure as green bonds.  

We pledge to support this goal by establishing a green bonds strategy that will finance infrastructure and capital projects that meets the challenges of climate change while transforming our community into a competitive, prosperous and productive economy.

Peter Cripps