The FINANCIAL — London Stock Exchange today welcomes the listing of China Construction Bank Hong Kong branch’s US$1 billion bond on its International Securities Market. The bond, part of CCB’s $15 billion MTN programme, becomes the first Sustainability Bond listing on London Stock Exchange’s ISM.
The three-year floating rate bond received strong demand from international investors, reinforcing London’s position as a key global partner for China.
CCB will use the proceeds to finance activities in eligible green and social projects that promote a green and low-carbon economy and develop a more inclusive society in accordance with the bank’s Green, Social and Sustainability Bond Framework. The notes have received Ernst & Young Hua Ming independent external review.
This issuance cements London’s position as one of the leading international green and sustainable financing centres, and reinforces the UK’s strengthening economic and financial relationship with China.
In June 2018, Industrial and Commercial Bank of China London Branch (ICBC) issued US$1.58 billion equivalent green bond, the largest ever green bond listing on London Stock Exchange.
London Stock Exchange is home to 80 green bonds which have raised over $26.4 billion
In 2015 London Stock Exchange became the first major exchange to launch dedicated green bond segments creating strict admission criteria aligned with ICMA’s Green Bonds Principles.
London has hosted many landmark green bond issuances including the first international Green Bond and Green Covered Bond from China, the first Green Masala Bond, the first Green bond from the Gulf region and most recently, with the issuance by Fiji, the President of COP 23, the first sovereign green bond by an island state.
There are 70 ‘green companies’ with a combined market cap of $94.3 billion in London, including 14 renewable investment funds with a combined market cap of over $7 billion.
In May 2018, FTSE Russell published a report on the size and scale of the green economy; Investing in the global green economy: busting common myths highlights that the green economy represents 6% of the market cap of global listed companies, approximately $4 trillion.
FTSE Russell’s 2018 Smart Beta survey, published in May 2018, shows that more than 40% of global asset owners anticipate applying ESG to a smart beta strategy in the next 18 months – nearly half for performance reasons.
In November 2016, FTSE Russell announced the creation of a new index, the FTSE All-World Ex CW Climate Balanced Factor Index, the first to combine a smart beta factor approach alongside climate change considerations.
The index has been chosen by Legal & General Investment Management for its new Future World Fund, which HSBC Bank UK Pension Scheme has selected for its equity default option, worth £4 billion, in its DC scheme.
LSEG has been supporting investors and issuers in the transition to a low-carbon and sustainable economy for over a decade, developing innovative products and services in close collaboration with the market. Its comprehensive sustainable finance offering is focused on green financing for issuers (both debt and equity), indexing and analytics. London’s markets are home to a diversified portfolio of green bonds, ETFs, renewable investment funds and corporates whose business models encompass alternative energy.
LSEG joined the UN’s Sustainable Stock Exchanges Initiative as a Partner Exchange in 2014 and has also signed The Paris Pledge for Action.