KPMG launches guide for green bond issuers

A new guide for private and public sector organisations aimed at overcoming common challenges around issuing green bonds has been published by KPMG.

Valued at $37bn in 2014, the market for green bonds is expected to reach $100bn this year, with a third of the market comprising organisations in the energy and utilities, consumer goods and real estate sectors. Green bonds are typically used to raise capital to fund green activities with an environmental benefit, such as renewable energy, low carbon transport or forestry projects.

The publication ‘Gearing up for Green Bonds’ provides an overview of evolving green bond frameworks and standards including the Green Bond Principles, Climate Bonds Standard and green bond indices. It also provides advice on defining a green bond, choosing the right level of external assessment and protecting the issuer’s reputation and the credibility of the green bond.

“Sustainability investment has become a major boardroom issue for many of Ireland’s leading corporates and green bonds represent an attractive funding option particularly given the appetite from the global investment community to invest in this asset class,” said Caroline Pope in KPMG’s Irish climate change and sustainability practice. “This fact, together with a growing renewable energy and energy efficiency sector, would suggest that the potential for the market in green bonds to grow in scale over the coming years is significant.”

“The green bond market is growing rapidly with US$100 billion of issuances predicted for 2015,” said KPMG’s global head of sustainability services, Adrian King. “Perhaps inevitably in a new and fast-growing market, standards and ideas of best practice are still evolving. Challenges and confusion can arise as organisations assess whether issuing a green bond is the right course of action for them and seek to understand the process involved.