- The Corporate Forum on Sustainable Finance
- The Global Green Finance Council (GGFC)
- The Loan Principles (GLP & SLLP)
- The Green Bond Pledge
- Network of Central Banks and Supervisors for Greening the Financial System (NGFS)
- Financial Stability Board - Task Force on Climate-related Financial Disclosures (Task Force)
- G20 Sustainable Finance Study Group
- The Sustainable Banking Network (SBN)
- The Sustainable Stock Exchanges (SSE)
- The Global Investors for Sustainable Development Alliance (GISD)
- The International Platform on Sustainable Finance (IPSF)
- The Coalition of Finance Ministers for Climate Action
- ASEAN Market
- Brazilian Market
- Chinese Market
- European Market
- Japanese Market
- Kenyan Market
- Mauritius Market
I. Listed below are some of the initiatives led internationally to further green and sustainable finance:
In February 2020, ICMA published a Compendium of international policy initiatives and best market practice for sustainable finance, intended to provide stakeholders with an easy reference point to the numerous national and international developments in the field.
The Corporate Forum on Sustainable Finance
In January 2019 – one year after the Paris Green Bond Pledge, published to mark 2017 Climate Finance Day, sixteen European companies (EDF, EDP, ENEL, ENGIE, Ferrovie Dello Stato Italiane, Iberdrola, Icade, Ørsted, RATP, SNCF Réseau, Société du Grand Paris, SSE, Tennet, Terna, Tideway, Vasakronan) have joined to set up the Corporate Forum on Sustainable Finance (“the Forum”). The Forum, designed as a permanent network for exchanging views and ideas, brings together dynamic “Green Issuers” committed to upholding and developing sustainable finance as a critical tool to fight climate change and to foster a more sustainable and responsible society.
The Global Green Finance Council (GGFC)
The GGFC was created in 2017 with the objective to bring together key global and regional associations and other stakeholders involved in the green financing. The industry joined forces to coordinate efforts to promote green finance, facilitate cross-fertilisation between related markets and asset classes, and with the ambition to act as a representative counterparty to the official sector on green finance policy matters. GGFC has published a directory is to provide policymakers and global and regional market participants a simple, easy-to-use reference guide as to which international and regional governments and industry bodies have implemented or are implementing major initiatives on green, sustainability and climate change.
The Loan Principles (GLP & SLLP)
In March 2018 the LMA, together with the APLMA, launched the Green Loan Principles (GLP) with the support of the International Capital Market Association (ICMA). The GLP aim to create a high-level framework of market standards and guidelines, providing a consistent methodology for use across the wholesale green loan market.
In March 2019 the LMA, together with the APLMA and LSTA, launched the Sustainability Linked Loan Principles (SLLP) with the support of the International Capital Market Association (ICMA). The sustainability linked loan product is a dynamic and innovative product that enables lenders to incentivise improvements in the borrower's sustainability profile by aligning loan terms (for example, margins) to the borrower's performance against ambitious, pre-determined sustainability performance targets.
The Green Bond Pledge
The Green Bond Pledge is a joint initiative developed and designed by international climate finance and environmental groups including the Climate Bonds Initiative, Mission 2020, CDP, Ceres, Citizens Climate Lobby, California Governor's Office, California Treasurer's Office, Global Optimism, NRDC & The Climate Group. The Green Bond Pledge is a simple declaration with broad and far-reaching impact. All bonds that finance long-term infrastructure and capital projects need to address environmental impact and climate risk.
Network of Central Banks and Supervisors for Greening the Financial System (NGFS)
At the Paris “One Planet Summit” in December 2017, eight central banks and supervisors established a Network of Central Banks and Supervisors for Greening the Financial System (NGFS). The Network’s purpose is to help strengthening the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and to mobilize capital for green and low-carbon investments in the broader context of environmentally sustainable development.
Financial Stability Board - Task Force on Climate-related Financial Disclosures (Task Force)
In December 2016, the Task Force published its report setting out some recommendations for helping businesses disclose climate-related financial risks and opportunities within the context of their existing disclosure requirements.
G20 Sustainable Finance Study Group
The objective of the G20 Green Finance Study Group (GFSG) is to “identify institutional and market barriers to green finance, and based on country experiences, develop options on how to enhance the ability of the financial system to mobilize private capital for green investment”.
The latest green finance synthesise report was published in July 2017
The Sustainable Banking Network (SBN) is a community of financial sector regulatory agencies and banking associations from emerging markets committed to advancing sustainable finance in line with international good practice. The Network facilitates the collective learning of members and supports them in policy development and related initiatives to create drivers for sustainable finance in their home countries. The idea for the SBN arose during the first International Green Credit Forum, hosted by IFC and the China Banking Regulatory Commission, in Beijing in May 2012, where banking regulators and associations from 10 countries requested that IFC facilitate a global knowledge network on sustainable banking. The Network was formally launched in September 2012.
The Sustainable Stock Exchanges (SSE)
The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. Launched in 2009 by the UN Secretary General, the SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.
The Global Investors for Sustainable Development Alliance (GISD)
In a joint call to action in September 2020, leaders of prominent businesses and financial institutions encouraged companies and governments to issue innovative social bonds to address the COVID-19 pandemic. Funds raised through these bonds would be used for the immediate response to COVID-19 and to support a sustainable recovery. The GISD's statement defines the direct and indirect challenges presented by the pandemic and outlines the expectations for a COVID-19 bond issuance, in alignment with the Sustainable Development Goals (SDGs). The GISD is an alliance of 30 business leaders convened by the United Nations Secretary-General to provide decisive leadership in mobilizing resources for sustainable development.
The International Platform on Sustainable Finance (IPSF)
On 18 October 2019, the European Union launched together with some relevant authorities the International Platform on Sustainable Finance (IPSF). Together, the 14 members of the IPSF represent 50% of greenhouse gas emissions, 50% of the world population and 45% of global GDP. The ultimate objective of the IPSF is to scale up the mobilisation of private capital towards environmentally sustainable investments. The IPSF therefore offers a multilateral forum of dialogue between policymakers that are in charge of developing sustainable finance regulatory measures to help investors identify and seize sustainable investment opportunities that truly contribute to climate and environmental objectives. Through the IPSF, members can exchange and disseminate information to promote best practices, compare their different initiatives and identify barriers and opportunities of sustainable finance, while respecting national and regional contexts. Where appropriate, willing members can further strive to align their initiatives and approaches. A first public report on the work of the IPSF was published on 16 October 2020.
The Coalition of Finance Ministers for Climate Action
On April 13, 2019, governments from 26 countries joined forces to launch the Coalition of Finance Ministers for Climate Action, which recognized the challenges posed by climate change, the unique capacity of the world's finance ministers to address them, and the ways in which these efforts could be strengthened through collective engagement. Since its launch, finance ministers from fifty countries have signed on to the Helsinki Principles, a set of six principles that promote national climate action, especially through fiscal policy and the use of public finance. The Helsinki Principles are designed to be aspirational; they are non-binding and are not listed in any order of priority.
| The Green and Social Bond Principles Executive Committee supports the growth of sustainable finance worldwide through its New Markets Taskforce which offers assistance with providing feedback on regional Green/Social/Sustainability Bond guidelines or standards as they are developed by their respective institutions / countries. A recent example where the Taskforce provided such feedback was to the ACMF – see ASEAN Market below. All requests for assistance must be submitted to greenbonds@icmagroup.org at a minimum of two weeks prior to due date of feedback, in order to ensure time for adequate review and effective comments. |
II. Listed below are some of the regional and national initiatives to further green and sustainable finance:
ASEAN Market
On November 2017, the ASEAN Capital Markets Forum (ACMF) issued Green Bond Standards.
The Standards, revised in October 2018, were developed based on the Green Bond Principles (GBP) tailored to meet the needs and commitment of ASEAN. The Standards label is to be used only for issuers and projects in the region and specifically excludes fossil fuel related projects.
The ACMF continues to place emphasis on sustainable finance and launched in October 2018 the ASEAN Social Bond Standards and the ASEAN Sustainability Bond Standards.
To see the list of ASEAN Green Bonds/Sukuk issued click here.
The ACMF has produced in December 2018 a document Aligning sustainable finance with the Sustainable Development Goals (SDGs).
Malaysia has implemented the ASEAN Standards and SRI Sukuk Framework via incorporating the requirements into the Guidelines On Unlisted Capital Market Products Under The Lodge And Launch Framework (see especially Part 3, Chapters 7 and 8) and the Guidelines On Issuance Of Corporate Bonds And Sukuk To Retail Investors (see especially Part E, Chapter 20 and Part F, Chapter 21).
The Philippines Securities and Exchange Commission has approved on 16 August 2018, the “Guidelines on the Issuance of Green Bonds Under the ASEAN Green Bonds Standards.” These Guidelines set out to adopt the ASEAN Green Bond Standards and provide for the rules and procedures for the issuance of ASEAN Green Bonds in the Philippines.
Asia-Pacific Region
The newly established Asia Securities Forum Working Group for Promotion of SDGs conducted a survey on SDGs with special focus on the status of ESG and sustainable finance in the ASF member jurisdictions. The survey, aiming to collect information on ESG investment in the region in a manner that can be compared across borders, was compiled and published in August 2019.
Brazilian Market
The ‘Guidelines for Issuing Green Bond in Brazil 2016’ aim at providing recommendations to participants in the Brazilian fixed income securities market on the process of issuing Green Bonds. It also intends to contribute to the development of this market in the country.
Chinese Market
Official Rules: ICMA is pleased to make available to the market English versions of the Green financial bond rules of the People’s Bank of China (PBOC). The documents include the PBOC Announcement and the Preparation Instructions on Green Bond Endorsed Project Catalogue (2015 Edition). These translations have been coordinated and made available by ICMA for information only. In case of any discrepancy between these translations and the original Chinese version, please refer to the Chinese version as the official document.
NAFMII (National Association of Financial Market Institutional Investors) and ICMA Report: A comprehensive report on how the Green Bond market in China has developed over the past few years has been published in March 2017, detailing the critical factors which have allowed Green Bond issuance in China to expand so rapidly, with reference to developments in the international green bond market. It aims to provide issuers, investors and other market participants with information about the development of the Chinese and international green bond markets, including operational practices, standards and reporting, to encourage more participation in this market and expand financing channels for sustainable development.
Access ‘The practice and prospects for green bond market development at home and abroad’ (Chinese)*
Access ‘The practice and prospects for green bond market development at home and abroad’ (English)*
*These documents are locked to ICMA members only. Members of NAFMII and members and observers of the Principles may access the documents on request.
European Market
The European Commission set up a Technical Expert Group on Sustainable Finance (TEG) to assist it in developing, in line with the Commission's legislative proposals of May 2018:
- an EU classification system – the so-called taxonomy – to determine whether an economic activity is environmentally sustainable;
- an EU Green Bond Standard;
- benchmarks for low-carbon investment strategies; and
- guidance to improve corporate disclosure of climate-related information.
For more information regarding the work of the TEG and the legislative proposals that frame their work, see also the frequently asked questions.
In a first initiative, the TEG shared on 7 December 2018 its preliminary results on how a unified EU-wide classification system – or taxonomy – for environmentally sustainable economic activities, could be put in place, and at the same time asks for technical input from interested stakeholders and experts. Participants will be invited to comment on the first proposed activities that contribute substantially to climate change mitigation and to answer questions on the usability of the taxonomy. The ultimate aim is to develop a system that provides businesses and investors with clarity on which activities are considered sustainable so they take more informed decisions.
A number of workshops to gather technical expertise from interested parties is also envisaged.
The invitation for feedback should help the technical expert group to engage with a broad range of stakeholders and experts and will close on 22 February 2019.
Japanese Market
The Financial Services Agency of Japan published in October 2021 its Social Bond Guidelines, intended for use as reference when considering specific measures regarding Social Bonds issued by ordinary companies in the private sector.
The Ministry of the Environment, Japan, established the "Green Bond Guidelines, 2017" on 28 March 2017 with the purpose of spurring issuances of Green Bonds and investments in them in Japan.
Kenyan Market
On 20 February 2019, Kenya launched its green bonds regulatory framework: The launch of the green bonds market has been embedded in the legal framework through the publication of a Policy Guidance Note (PGN) on Issuance of Green Bonds and the approval of amendments to the NSE Listing Rules by CMA.
Mauritian Market
In order to channel efforts towards the implementation of the SDGs in a holistic manner, the Government of Mauritius requested the United Nations Development Programme (UNDP) for support, and in 2016, a UNDP team fielded a mission in Mauritius to assist in the development of a Roadmap for the implementation of the 2030 Agenda. This Roadmap, which was published in 2017, listed out 6 critical success factors for the implementation of the 2030 Agenda, with one critical success factor being the financing of the SDGs3 It was noted that achieving Mauritius’ ambitious national development priorities would require significant investments in sustainable development, and a financing strategy was of utmost importance to ensure that resource constraints do not become an obstacle. One key recommendation in this context was the development of a Green Finance framework for Mauritius and the exploration of the issuance of innovative financial instruments, including Green Bonds.
III. Other useful Links:
Equator Principles
The Equator Principles (dated June 2013) is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. It is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.
Currently 89 Equator Principles Financial Institutions (EPFIs) in 37 countries have officially adopted the EP, covering over 70 percent of international Project Finance debt in emerging markets.
UN Sustainable Development Goals
In September 2015, countries adopted a set of goals to end poverty, protect the planet and ensure prosperity for all as part of a new sustainable development agenda. Each goal has specific targets to be achieved over the next 15 years.
