Year in data 2015: Green bonds

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Corporates move in on green bonds.

The UN Climate Change Conference in Paris in November and December rounded off a year when attention turned as never before to the issue of how financial markets can positively impact the environment. That attention helped promote the green bond sector, but it also made people question more closely the nature of this nascent market.

Until recently, most discussion centred on issuer strategies. Few people had thought to ask investors in detail for their views on green bonds. Euromoney changed that with our Green Bond Investor Survey, published in September. Opinions were often divided: for example, while the majority of investors were not concerned about a lack of firm definition for green bonds, a majority wanted an internationally-agreed set of rules.

One thing was clear: most investors (73%) wanted to see more corporates issue green bonds than any other sector (see top chart). In addition, almost three-quarters of investors said their dialogue with issuers had become more intense in light of the development of the green bond market.

And it seems that issuers, and their lead bankers, were listening. November was the biggest month ever for labelled green bond issuance. World Bank-compiled data (see bottom chart) clearly shows the growth in the corporate sector. At the end of November the running annual total issuance in this sector exceeded $13 billion – up from $9.1 billion for full year 2014.

Will 2016 be another record year for green bond issuance? One issue that participants urgently need to sort out is impact reporting. We take a close look at some of the potential solutions in our feature from our January edition.

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