The Ultimate Green Bond Rating
Green bonds are debt instruments used to finance development projects and operations that claim to be “green”, a proxy term for “sustainable” or “climate-friendly”. The 2021 green bond market is predicted to grow to $USD 250 - 500 billion per annum (Forbes 2020). This is still a very small proportion of the total $USD 128 trillion global bond market, which is expected to contract 3% in 2021 because of COVID-19 effects (S&P2020)
Recently, Government financial authorities have reviewed certain green bond labels and found that some of their exposures are not materially different from others that are not labelled "green" (UK Financial Conduct Authority 2019). Investors want to know if a bond is truly "green" before they invest in it. They want to be assured that a bond is both "credit-worthy" and "planet-worthy". There is a growing trend of investors being wary of voluntary or industry-based ratings or certifications. A similar trend has also been present in non-finance market sectors. Independent, robust and reliable verification to a meaningful standard is needed.
As independent science-based assessors, we offer independent Green Bond Ratings using five rating criteria: Project Description, Environmental and Social Governance criteria (ESG Suite) customised for the activity, Suitably Qualified Persons (from appropriate technical disciplines must make the claim on behalf of the applicant), Monitoring and Transparency. GreenBondRatings@GreenXperts™ are GGG™ (excellent), GG™ (very good), G™ (adequate) and F (fail).
Listings of GreenXperts™ rated bonds are at XLink. We believe that one day, all bonds should be "green".
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