Green Finance
Green Integrity
Green bonds, an important financing tool in the transition to a low-carbon economy, have grown rapidly in recent years. The global consensus on the Paris Agreement and the United Nations Sustainable Development Goals (SDGs) has established a stable direction for the medium and long-term development of green project financing. In 2017, green bond issuance reached US$155.5 billion globally, indicating an increase of 78% year-on-year. It is estimated that by the end of 2020, the green bond market will hit 1 trillion US dollars annually.1
Both investor interest and confidence in the green bond market have continued to grow. In mature and emerging markets alike, regulatory bodies are gradually improving their system for green finance. Due to strong local demand for infrastructural facilities and the widespread application of green technologies, Asia has become the world’s most active region for green bonds. China has established green bond verification guidelines while India has promulgated listing regulations for green bonds. The ASEAN has formulated green bond standards and Hong Kong and Singapore are set to provide subsidy incentives to green bonds issued there. This new scenario will certainly encourage more and more organisations to choose green bond as their financing tool.
CCA is ready to provide companies and financial institutions with an integrated and comprehensive consultancy services on green bond issuance and verifications. By ensuring green-plus standards, we hope to enable international investors to add bonds from China and other Asian countries to their portfolios with confidence that the selected bonds represent the highest financial, environmental, social and resilience standards.
Bond Issuance – an Integrated Service
Bond Verification – an Approved Verifier
Carbon Care Asia is the first company based in Hong Kong and Singapore to receive Approved Verifier status from the Climate Bonds Initiative (CBI) headquartered in London under its Climate Bonds Standard & Certification Scheme. This status strengthened CCA's capacity to promote green finance in the Asian region.
The Climate Bonds Standard & Certification Scheme allows investors, governments and other stakeholders to prioritise ‘low carbon and climate resilient’ investments with confidence that the funds are being used to deliver a low carbon and climate resilient economy. A Scientific Framework underpins the definitions of which projects and assets are consistent with a low carbon and climate resilient economy and therefore eligible for inclusion as a Certified Climate Bond.
The Approved Verifier plays an important role in assessing whether the issuer and the proposed bond meet the requirements of the Climate Bonds Standard and provides a report to the bond issuer. The Climate Bonds Standards Board of CBI makes the final decision based on the information provided by the issuer, including the Verifier’s Report.
As an Approved Verifier, CCA provides verification service to issuers of climate bonds to assess the eligibility and readiness of related projects at the pre-issuance stage, as well as to provide assurance over the actual use of proceeds and internal systems and controls at the post-issuance stage. For issuers adopting other green bond principles, CCA is able to provide external review service and second-party opinions.
Green loan is fast becoming the next big wave in green finance after green bond. Similar to green bond, prospective investors always desire greater transparency and clarity on the green credentials and positive environmental impacts of the projects.
The Loan Market Association has launched the Green Loan Principles in March 2018 to stress on similar core components as in Green Bond Principles:
Depending on client needs, CCA can assist borrowers to develop green loan frameworks that align with industry-specific standards, to conduct external reviews, and to issue second-party opinions.
1 Source: Climate Bonds Initiative (2018)