Climate Bonds Standard& Certification Newsletterns
tio 18ca 20
tifi oftifi

ca

Up tio
da ns
te

2018
Year in
Review

New Criteria
Launches &Updates

m
ro G
sf E
w UT
Ne e EthCer

Climate Bonds
Standard V3

er
tC
es
gg
Bi

CBI’s Adaptation& Resilience Expert
Group launchedBu
De ildve inglo s
pm Cr
en itets ria

H2 2018 ISSUE 8

Climate Bonds Initiative
Annual Conference
March 2019, London
Register Now
H2 2018 ISSUE 8

PAGE 1

2018: Total Climate Bonds Certifications
tops USD 50bn

Ten Programmatic Certifications
awarded to date

By the end of 2018, USD57bn of green bonds had been Climate Bonds
Certified. The use of Certification really started to ramp up in 2016 (seethe graph on pg.4), so to have already passed the USD50bn mark is a great
achievement for the scheme.

Programmatic Certification streamlines the Certification for
Issuers who plan to issue multiple Certified bonds against alarge pool of assets.

Regarding market coverage, Climate Bonds Certification continues to cover
approximately 15% of total annual green bond issuance. Overall, 2018 saw
a total of 43 Certified Climate Bonds and other debt instruments issued.
As Sector Criteria continue to be developed (see timetable on pg.5),
Climate Bonds Certification will be possible both pre- and post-issuancefor a widening pool of bonds. In 2019 we expect to see Climate Bonds
Certification for an increasing percentage of the green bond market.

Climate Bonds Standard
supports development of
the EU Taxonomy
As an NGO, much of what we produce is open
source and deliberately so. We want otherinstitutions and organisations to use what
we’ve developed and we are always happy toengage with others to help them understandhow they can use what we produce.
In 2018 we saw many different institutions
and organisations leveraging the researchdone under our Climate Bonds Standard
programme. The development of an EU-level
Sustainable Finance Taxonomy and ISO’s
development of a green bond standard are
two examples.
Following the HLEG’s final report ‘Financing
a Sustainable European Economy’, publishedin January 2018, the Commission launched
the Technical Expert Group on Sustainable
Finance, ‘the TEG’, in June 2018. Our CEO,
Sean Kidney, earned a spot on the TEG,
particularly to assist in developing an
EU Sustainable Finance Taxonomy that
determines whether economic activity isenvironmentally sustainable.

July 2018
EU Technical Expert Group(TEG) began work on asustainable finance taxonomy

Sep 2018
Climate Bonds
released full update toits Taxonomy

H2 2018 ISSUE 8

Rather than going through the process of Certificationfor each bond issuance, the whole pool is Certified at the
beginning, at the time of the first bond issuance.
Subsequently, when the Issuer issues more bonds against
the same asset pool, each bond only requires post-issuance
verification. This method makes the process significantly
simpler for the Issuer.

The development of the EU Sustainable
Finance Taxonomy has prioritised screening
metrics for climate change mitigation andadaptation as a first phase. Metrics for otherenvironmental and social objectives will be
added to the Taxonomy in a second phaseof work.
Recognising all the hard work and the vast
stakeholder engagement that has been done
over the years by the technical and industry
experts through the development of the
Climate Bonds Taxonomy and the various
Sector Criteria, we have been feeding in
all these learnings into the EU Sustainable
Finance Taxonomy development.
The TEG has just released the first wave of
screening criteria for public consultation
and we are pleased to say these are closelyaligned with the Climate Bonds Taxonomy
and Sector Criteria.
The TEG is now looking for writtencomments on (1) the usability of thetaxonomy and (2) the 1st round of mitigation
activities. Consultation is open until 22nd
February 2019, feedback can be submitted
through the dedicated online surveys.

Dec 2018
TEG published 1st roundof mitigation screening
criteria

The International Organisation forStandardisation (ISO) is developing
environmental management standards,
which will focus on melding economics andenvironmental management. This includes
ISO 14030 for green bonds and ISO 14097 forthe assessment and disclosure of climatechange risks of investments. Alongside a
multi-stakeholder working group, the Climate
Bonds Standard & Certification team are
actively involved in the development of the
ISO green bond standard. The intention is toleverage existing principles from the Climate
Bonds Standard, Green Bond Principles,
European Investment Bank and Green FinanceCommittee of the China Society for Finance,
and to have a high degree of integration withthe work of the TEG. ISO expects to publish
the standard in 2020.
Having the opportunity to feed in theknowledge we’ve gathered over the years
into these important developments has beena real highlight of 2018. It is exactly what
we have been hoping to do with our body ofwork and it is great to see that the market
now generally agrees there is a need forgreen definitions and standardisation.

June 2019
TEG will publish 2ndround of mitigation
screening criteria

2020
ISO expects
to publish its
green bondstandard

Annual review andupdat of the Climate
Bonds Taxonomy

PAGE 2

Full update to the
Climate Bonds Taxonomy
published in 2018
The Climate Bonds Taxonomy has beenaround since 2013. It is an ever-evolving
document in response to the latest science,technology and developments we are seeingin the green finance market.
The Climate Bonds Taxonomy is a guideto climate aligned assets and projects. It
identifies the assets and projects needed
to deliver a low carbon economy acrosseight sectors: energy, transport, water,buildings, land use & marine, industry,
waste and ICT.

In 2018, we conducted a comprehensive
update to the content and format of our
Taxonomy. We incorporated all the learnings
from our myriad of technical and industry
working groups and sought to improve theway users can utilize our content.
The update was released in September 2018
and since then we have held webinars andevents to explain what the Taxonomy is andhow it can be used.
For those of you who may have missed thewebinars, a recording is available online.
We expect to be announcing more briefing
sessions in early 2019, so keep your eyes on
the blog – all events are announced there.

2019: Standard V3.0 on
the way
In 2019 there will be a new version of the
Climate Bonds Standard, Version 3.0, andit will include many anticipated updates.
Version 3.0 reflects the latest developmentsin the green bond market and integrates
the relevant regulatory frameworks thathave emerged since January 2017, when theprevious Version 2.1 was released.
Version 3.0 takes into consideration thechanges introduced by ICMA’s Green Bond
Principles 2018 as well as the various green
bond guidelines issued by different regional
bodies and national governments such
as Japan, India, China and ASEAN. The

We host 2019 Conferencein London, March 5 to 7th
Trillions of dollars in investments are needed
to support the transition to a low carbon,
climate resilient economy. Green bonds andclimate bonds have become an integral partof the climate finance response to meet thisneed. In 2018, we saw approximately $200
bn worth of issuances, but going forward, we
will need to see trillions in green investment
through the 2020s to make a real difference.
The Climate Bonds Annual Conferencein 2019 will explore options for scalingup the green bond market from billions
to trillions over the coming decade. Join

TAXONOMY
Full update
released
September
2018

objective of Version 3.0 is to be the mostinternational and cross compatible green
bond standard available to the market.
Certified Climate Bonds issued by any
entity from any country will be quickly
and easily verified based on the samerequirements and low carbon credentials.
Changes from Version 2.1 to Version 3.0of the Standard were recommended byexpert practitioners in the green bondmarket and were followed by a thoroughpublic consultation process in November
and December 2018. After the feedback
has been considered and incorporated, theClimate Bonds Standard Version 3.0 will bepresented for approval to the Climate Bonds
Standard Board in February 2019 before its
public release scheduled in March 2019.
us on 5th – 7th March 2019 in London.
Since the launch of our Annual Conference& Green Bond Pioneer Awards, we havebrought together asset owners, investment
managers, infrastructure and debt
specialists, issuers, underwriters, regulatorsand policymakers to share their experiences
and identify solutions to the challenges
facing climate finance.
Join us for in depth discussions on potential
solutions with delegates from over 60
countries. Don’t miss the chance to networkand exchange knowledge with peers andleading institutional representatives.

REGISTER NOW
Climate Bonds Initiative
Annual Conference
5th-7th March 2019, London
H2 2018 ISSUE 8

PAGE 3

H2 2018 Climate Bonds Certification up 40% from H1 2017
Cumulative Certified Issuances through December 2018
Total Certified Issuances todate - USD 56.9 bn

$60bn
$50bn

Q4 2018 thesecond largest
quarter so far,at USD 9.8 bn

$40bn
$30bn
$20bn
$10bn
0

Q2 Q3 Q4
Q1
Q2 Q3 Q4
Q1
Q2 Q3 Q4
Q1
Q2 Q3 Q4
Q1
Q2 Q3 Q4
Q1
Q2 Q3 Q4
2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018

The second half of 2018 saw the issuance ofseveral ground-breaking Certified Climate
Bonds and clear signs that the market isgaining momentum worldwide.
ING Group’s USD 2.9 bn issuance was thelargest Certified Climate Bond to date. The
bond is comprised of a USD 1.3 bn tranche anda EUR 1.5 bn tranche with tenors of 8 and 12
years respectively. Proceeds will be used foronshore and offshore wind farms, solar energy
farms and buildings with the 15% lowest
emissions performance in the Netherlands.
This will be ING’s first Certified Climate
Bond and its second green bond to date.
Issuing a Certified Climate Bond continues
the leadership they have taken amongst

European banks to grow their sustainablefinance business and align their lending to
the Paris Agreement’s goals.
Another recent landmark Certified Climate
Bond was the first EMTN EUR 1.8 bn (USD
2 bn) of a series from the Société du Grand
Paris, the entity established by the French
Government to build and deliver the ‘Grand
Paris Express’. The project will extend two
existing Paris Metro lines and build four newlines, carrying up to 2.5 million passengers
daily and providing low carbon transport
options across a large swathe of Paris. In
total, the plan includes 200km of new metroand commuter rail lines and 68 new metroand commuter rail stations, compared to theexisting 400km network.

Two Certified Climate Bonds were also
issued in South America to support
renewable energy development in H2, 2018.
These are linked to solar energy assets in
Colombia (EPSA, COP 70 bn (USD 24 mn))
and wind energy assets in Brazil (Rio Energy,
BRL 128 mn, (USD 31 mn)).
Climate Bonds also Certified a 5-year, $650
mn issuance by the State Bank of India in
September. With its proceeds linked to solar
and wind energy assets in India, this is verymuch aligned with India’s national renewableenergy targets, which were raised from
70GW in mid-2018 to 227GW by 2022. This
was an incredibly important policy signal forthe development of the green bond market
in India.

Certified Bonds for mixed
proceeds more common

Certified loans take larger shareof Certified market

Global Distribution of all
Certified Issuances by value

Geothermal 3%
Wind 5%
Water 3%Development Bank 4%
ABS 4%
Sovereign 0.05%

Belgium Philippines
BrazilLux
Canada Mexico
UK

Buildings
17%

Local
Government
19%

Transport
24%

Mixed
proceeds
40%

Mixed Renewable Energy 7%		Solar 1%H2 2018 ISSUE 8

NewZealand3%

Nonfinancial
Corporate10%

Non-Financial
Corporate
24%
Government
BackedEntity17%

Financial
Corporate
42%

Germany
7%
Norway5%
India
7%France11%

Netherlands
13%

Italy
Nigeria
Singapore
South Africa
MoroccoColombia
Thailand

China
18%

UnitedStates16%
Australia
14%

Loan 4%

PAGE 4

Sector Criteria published, launched and developing in 2019
Pre-Development

Development

Public Consultation

JAN - MAR

Approval for Certification

APR - JUN

Available for Certification

JUL - AUG

OCT - DEC

Buildings

Bioenergy

Hydropower

Waste

Fisheries

Agriculture

AREG

Shipping

Existing Standards
EO

THERM

RE

A

N E WA B L

MARIN
IN

FO

R E S T RY

FRASTRUCAR B ON B U I L

D
GS

URE

IN

ER

SOLAR

R

LO W

R
LO W C A

N LAND T

ER GY

BO

E
EN

L

G

E

WIND

CT

H2 2018 ISSUE 8

Unlike previous Technical Working Groups(TWGs) convened by Climate Bonds, theA&R Principles established by AREG will apply
across all current and future Climate Bonds
Criteria under the Climate Bonds Standard
that form the basis of our international
Certification scheme.

We look forward to launching of the A&R
Principles for public review by July 2019.

SP ORT

The launch of AREG comes at a critical time
when markets are increasingly looking for
guidance on what defines climate-resilient
projects, assets and bonds. To date, green
bonds have mostly focused on mitigation
efforts, with less emphasis on adaptation.
This is primarily due to the fact that unlike
mitigation, where markets agree on a common
metric (CO2-emissions), A&R interventions

Over a period of eight months, the Groupwill discuss topics ranging from thedifference between asset- and system-level
resilience, methods for measuring resilience
outcomes, potential trade-offs between
mitigation and adaptation, as well as thepotential role of the insurance industry.
The Group has already held two meetings
thus far, to discuss A&R definitions and thequantification of A&R benefits.

investments at the asset-level, the A&R
Principles will identify investments thatenhance the resilience of broader systems
and communities.

AN

This November, Climate
Bonds convened andlaunched the Adaptation
and Resilience Expert Group(AREG) to develop high-level principles for
integrating Adaptation and Resilience (A&R)
into green bonds standards. Consistingof more than 35 expert members acrossacademia, non-profit, public and private
sectors, the Group brings together a diverse
set of perspectives that will work together
to streamline resilient thinking across all
sectors, with the ultimate aim of channelling
finance towards climate solutions that areboth low-carbon and resilient.

are highly context-specific and no standardised
metric exists for measuring A&R benefits.
In order to address the significant climate
impacts that are already locked-in, strategic
guidance is needed to introduce A&R criteria
across all sectors in a systematic andconsistent manner.

W AT

AREG Development

In addition to defining climate resilient

PAGE 5

What’s happening with our TWGs?
Agriculture

Hydropower

Shipping

Status: TWG
Developing Criteria

Status: Public
Consultation
Imminent

Status: TWG
Developing Criteria

The Agriculture Criteria
is ready start its first TWG meetingin February and the first IWG meetingin April.
The Issues Paper covered crucial areas
including cropland, paddy rice andperennial cropping systems such asagroforestry, fruit trees, coffee, tea,
cocoa and oil palm. Grassland such as
perennial grasses used for grazing bylivestock will also be covered. Livestockand their waste and also controlledenvironment agriculture including
greenhouse and hydroponic crops will
also be discussed.

Waste
Management
Status: TWG
Developing Criteria

Our TWG discussions are nearing thefinal stages and the Criteria will soon
be ready for sharing with the public for
consultation.The public consultation will
be held over two months.
The mitigation criteria have been
integrated into the EU Technical Expert
Group’s work on Sustainable Finance.
The criteria have leveraged the ESG Gap
analysis tool based on the frameworkof the Hydropower Sustainability
Assessment Protocol (HSAP). The tool
was launched in July 2018.

The Criteria development process isnearing completion and the Industry
working group has been convened.
Once feedback is received from thesegroup, the Criteria will be released for
public consultation in early 2019.

Fisheries

Bioenergy

Fisheries &Aquaculture: TWG
Developing Criteria

Status: Public
Consultation Just
Completed

Development of the Fisheries Criteria
continues swimmingly. The big question
we are grappling with is how to identify
a low carbon fishery and where to set
thresholds.

Get ready for the year of AsparaGas!

This appears to be an emerging questionin the fisheries space as research efforts
have mainly focussed on ensuring
sustainable fish stocks, rather thanemissions of fisheries.
We were very interested to see theSeychelles Blue Bond, which aims toachieve a transition to sustainablefisheries and sustainably develop theirblue economy, issued in October 2018.
Once criteria have been set for fisheries,
we will investigate whether the same canapply to aquaculture.
Expect to see these Criteria out for
public consultation in 2019!

H2 2018 ISSUE 8

The Bioenergy Criteria is reaching its
final stages of completion. After public
consultation was opened in May thisyear, the feedback received brought up
particular issues around the inclusionof woody biomass as a feedstock andcarbon debt calculation methods.
The Standards team put together
several options to address these
specific challenges presented these to
the TWG. The team are now presenting
the revised document to the standards
board and if all is approved, should be
releasing the Criteria in the first halfof 2019.

Shipping Criteria will
embark on the development process in
2019. Members of the TWG and IWG
have been finalized and the first roundof webinars is scheduled for the week
starting February, 2019. It will be an
exciting voyage as we chart the shipping
sector’s path towards decarbonization.
The issuance of green bonds by
NYK and Mitsui O.S.K. Lines, andMaersk’s commitment to becoming a
net-zero emitter by 2050, made waves
across the industry and we expect asurge in interest on the Shipping Criteria
going forward.

Buildings
Status: Criteria
Published,
Continually Expanding
As the Building Criteria is location
specific, it requires ongoing researchand development of localised low
carbon trajectories and market
performance proxies. We are excited toannounce several markets have been orare soon to be benchmarked using data
provided by local governments.
These include; Czech Republic, Poland,
Netherlands, Ireland, Sweden. Previous
benchmarked countries include China,
Norway, Belgium, South Korea, Mexico
City, Tokyo and Seattle.
For a full list of trajectories and proxies
available, see the relevant criteria page.
In addition to these updates, Climate
Bonds provides a range of guidance
documents, including easy to readmethodologies for establishing new
proxies, a Q&A.
An updated Criteria document is also
under development with planned
release in 2019.
We have also recently fed in our
principles and learnings on Buildings
riteria to the TEG’s Taxonomy
development.

PAGE 6

Snapshot of Certified Climate Bonds
H2 2018 (July to December) bonds by country breakdown
USA

UK

FranceGermany

Thailand China

Total issued:

Total issued:

Total issued:

Total issued:

Total issued:

Total issued:$977m

not disclosed$2.6bn

$628m

$155m

$1.9bnColombia

BrazilNetherlands

India

Australia

Total issued:

Total issued:

Total issued:

Total issued:

Total issued:

$24m

$31m

$3.5bn$650m$2.3bnFull details of all Certified Climate Bonds can be found on our website.

Meet the Climate Bonds Standard teamAnna Creed
Head ofStandards

Ujala Qadir
Climate Standards
Manager

Katie House
Senior Research
AnalystMeet the Climate Bonds Certification teamCory Nestor
Research Analyst
Buildings & Waste

Isobel Edwards
Research Analyst
Agriculture &Bioenergy

Lionel Mok
Research Analyst
Electric Grids &Shipping

Rob Fowler
Head of Certification

Matteo Bigoni
Certification
Manager

Carman Mak
Certification
Officer

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation
or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external
websites. The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt instrument or investment product and no information within this communication should
be taken as such, nor should any information in this communication be relied upon in making any investment decision. Certification under the Climate Bond Standard only reflects the climate attributes of the use ofproceeds of a designated debt instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national or international laws. A decision to invest in anything is solely yours.
The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole
or in part on any information contained within this, or any other Climate Bonds Initiative public communication. © Climate Bonds Initiative. Published January 2019. Designed by Godfrey Design.

Subscribe - Sign up here to our blog and receive our newsletters in your inbox.

H2 2018 ISSUE 8

www.climatebonds.net
PAGE 7