Green Finance Ratings
The Ultimate Green Finance Rating by Proven Sustainability Experts
G | GG- | GG | GG+ | GGG- | GGG
"Green Finance" is a term used to describe bonds, investments, shares, or other financial offerings that claim to be "green", "climate-friendly" or sustainable. For example, Green Bonds are debt instruments used to finance "environmentally-friendly" development projects and operations. 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.
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, science-based, robust and reliable sustainability verification to a meaningful standard is needed. Only this type of verification will satisfy the market and the courts. Other "green finance" offerings of many types and sizes are also promoted in the market, with varying shades of "green assurance" now being challenged by consumers and governments. More stringent legal standards on "green" financial claims are in the process of being enacted in various jurisdictions around the world.
The best solution is an independent green finance rating by proven sustainability experts. As science-based assessors with 30 years' unblemished experience, we offer independent Green Finance Ratings compliant with the required legal standards, using five rating criteria:
Project Description - the project being financed must be clearly defined;
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 - a key element often missing, needed to prove long-term reliability; and,
Transparency - the most commonly lacking element and the subject of the most public criticism.
The ESGs used, in particular, must be material to the industry sector involved. For example, greenhouse gas emissions are a material ESG in the Energy and Transport financing sectors, and water quality impacts are a material ESG in the Water financing sector.
We use a six point green rating scale of G | GG- | GG | GG+ | GGG- | GGG to verify green claims made by organisations, products, services and programmes. "Single G" is Adequate, "Double G" is Very Good, and "Triple G" is Excellent, with plus or or minus grades to show progress between the major ratings.
Check out the parent Green Ratings page for more information on our rating system.
Listings of GreenXperts™ rated Green Financial Instruments are at XLink.
We believe that one day, all finance should be "green".
Get in Touch with us to have any "green finance" offering audited; or to have your Green Financial Instrument independently rated by proven sustainability experts at GreenXperts - connecting your genuinely green offering with our powerful green assurance brand.