The FINANCIAL — A consortium of investment banks announced their support of the Green Bond Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank, JPMorgan Chase, BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB.
The FINANCIAL — A consortium of investment banks announced their support of the Green Bond Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank, JPMorgan Chase, BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB. These Principles were developed with guidance from issuers, investors and environmental groups and serve as voluntary guidelines on recommended process for the development and issuance of Green Bonds. They encourage transparency, disclosure and integrity in the development of the Green Bond market, according to JPMorgan Chase & Co.
These Green Bond Principles suggest process for designating, disclosing, managing and reporting on the proceeds of a Green Bond. They are designed to provide issuers with guidance on the key components involved in launching a Green Bond, to aid investors by ensuring the availability of information necessary to evaluate the environmental impact of their Green Bond investments and to assist underwriters by moving the market towards standard disclosures which facilitate transactions.
These Principles build on first-to-market issuances by multilaterals and provide a platform for other future Green Bond issuers to direct funding to Green Projects. They are complemented by an appendix of established definitions of Green Project categories that were developed by multilaterals, non-profit and non-government organizations, and other relevant stakeholders, according to JPMorgan Chase & Co.
The four banks that served as a drafting committee for these Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank and JPMorgan Chase – will propose in 2014 a governance process that will allow for diverse stakeholder input into the Green Bond Principles. It is anticipated that an independent third party will be designated to serve as a secretariat whose administrative duties will include facilitating information exchange with issuers, investors, underwriters, and other stakeholders such as non-profit environmental organizations, non-government organizations, academics and other thought leaders.
"The development of a robust and liquid market for green bonds is an important progression for debt markets," said Suzanne Buchta, Global Co-head of Green Debt Capital Markets at BofA Merrill. "In co-authoring these principles we attempt to help standardize the product and we hope to catalyze investment into environmentally sustainable projects, something to which our firm is very committed," she added.
"Citi is proud to be a co-founder of the Green Bond Principles as a voluntary guideline for bond issuers who are deploying capital to environmentally beneficial purposes," said Michael Eckhart, Citi's Global Head of Environmental Finance. "Our experience placing Green Bonds to date suggests that this will be a helpful guideline for corporate and public sector issuers," he added.
"Increasing the amount of capital targeted to address pressing environmental challenges such as climate change is critical," said Marilyn Ceci, Managing Director in the Corporate & Investment Bank at JPMorgan Chase. "JPMorgan Chase is pleased to have co-authored the Green Bond Principles, which involved strong collaboration among colleagues in our Corporate & Investment Bank and Environmental Affairs office. By providing transparency and integrity to the Green Bond market and bolstering investor confidence, we expect the Green Bond Principles will expand capital allocation to projects that provide environmental benefits," Ceci added.
"BNP Paribas is proud to partner with our fellow institutions to support the development of a robust Green Bond Market. Today's announcement is a crucial early step to foster the creation of a new transparent marketplace for socially responsible capital-raising and investment," said Jim Turner, Head of Debt Capital Markets for North America.
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