The FINANCIAL — London Stock Exchange Group on June 15 welcomes the listing of Industrial and Commercial Bank of China London Branch’s US$1.58 billion equivalent green bond on its International Securities Market and green bond segment. The green bond, part of ICBC’s $10 billion MTN programme, is the largest ever green bond listing on London Stock Exchange and the first Chinese issuance on ISM.
ICBC London Branch’s dual-currency green bond includes a three year floating rate dollar tranche which raised US$500 million, a five year floating rate dollar tranche which raised US$500 million and a three year floating rate euro tranche which raised EUR500 million. The bond priced at the tightest level ever achieved by ICBC in USD and EUR in a comparable floating rate notes format, according to LSEG.
ICBC London Branch will use the proceeds to finance eligible green assets under the bank’s Green Bond Framework, including renewable energy, energy efficiency, low-carbon transportation, sustainable water and wastewater management. The notes have received Climate Bonds Initiative Certification. CICERO and Zhongcai Green Financing Consultants Ltd. have also provided second party opinions on the company’s Green Bond Framework.
Nikhil Rathi, CEO, London Stock Exchange Plc & Director of International Development, LSEG:
“We congratulate ICBC London Branch on its successful green bond listing on LSEG’s International Securities Market today, the largest ever green bond on London Stock Exchange. The issuance represents ICBC’s commitment to address environmental issues and highlights investors’ increasing interest both in this asset class and in China growth stories. ICBC London Branch is also the inaugural Chinese issuer on our International Securities Market, reinforcing the UK’s strengthening economic and financial relationship with China of which London Stock Exchange is proud to play its part.”
Ruixiang Han, General Manager, ICBC London Branch:
“Not only does our Green Bond highlight ICBC’s ongoing commitment to sustainable and responsible financing, but launching it in London underscores our commitment to the growing positive relationship between the UK and China. ICBC London Branch sees the success of this issuance as testament to what can be achieved when you combine the strength and reputation of the world’s largest financial centre with that of the world’s largest bank.”
Claire Perry, UK Minister for Energy and Clean Growth:
“The transition to a clean, low carbon economy presents a multi-billion pound investment opportunity and we want UK businesses to take full advantage of it. We already have a world leading stock market, with more than 70 green bonds listed on London Stock Exchange, and, as part of our modern Industrial Strategy, we are determined to cement the UK’s position as a global hub for investment in clean growth, according to LSEG.
“Today’s launch of the largest ever green bond on the London Stock Exchange from the Industrial and Commercial Bank of China continues the momentum of the Green Finance Taskforce report published earlier this year, and provides a ringing endorsement that London is the place to raise green finance for renewable energy, energy efficiency and low-carbon transportation in all sizes of market across the globe.”
Sean Kidney, CEO, Climate Bonds Initiative:
“ICBC the world’s biggest bank, is again demonstrating global best practice with this latest Certified Green Bond. The record size and London listing from ICBC is a pointer for large institutional investors to the scale of green finance opportunities increasingly evident in China & now appearing throughout Asia as emerging economies address their climate, green infrastructure and sustainable development challenges.”
This issuance cements London’s position as a leading international green and sustainable financing centre, and reinforces the UK’s strengthening economic and financial relationship with China, according to LSEG.
London Stock Exchange is home to 78 green bonds which have raised over $24.5 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 73 ‘green companies’ with a combined market cap of $97.6 billion in London, including 13 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.
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