July 2018


It is hard to believe that we have already reached the half way point for 2018. It has been an exciting second quarter in the Green, Social and Sustainability Bond markets. This edition of the newsletter covers:



As always, we welcome your feedback.


The Secretariat for the Principles



Issuance News in Brief - Q2 2018


During the second quarter, issuance continued apace:


  • In the green bonds space, over 80 issuers priced transactions in 16 currencies amounting to $41.2bn bringing the year to date volume to about $71bn up from $61bn in H1 2017. Cumulative issuance is now well beyond the symbolic $400bn mark.

  • Social bond issuance came to $2.4bn in 6 currencies resulting in a H1 2018 total of $4.7 bn. $9.2bn of social bonds were issued in 2017, up 285% on 2016.

  • Sustainability bonds issued $2.6bn in 3 currencies, taking the year to date volume to $7.5bn up from $5bn for H1 2017.


Source: Dealogic, CA-CIB, Citi, HSBC 2018



Updates from the Secretariat and the Executive Committee


The Principles Updated for 2018/2019



The updated versions of the Green Bond Principles, Social Bond Principles and the Sustainability Bond Guidelines were published at the GBP/SBP AGM & Conference in June. Some of the key changes to the Principles this year included:


  • GBP: Distinction between suggested project types and five high level environmental objectives, namely climate change mitigation, climate change adaptation, natural resource conservation, biodiversity conservation, and pollution prevention and control;

  • GBP: Reference to international and national initiatives to produce green taxonomies and classifications;

  • SBP: Refinement of the definition of target populations that benefit from Social Projects;

  • GBP and SBP: Revised definitions of external review services; Emphasis on timely reporting by issuers to investors in the case of material developments;

  • SBG: confirmation that ESG or sustainability themed bonds are not aligned unless fully consistent with the four core components of the Principles.


Translations of the 2018 versions of the Principles into several languages are underway. The secretariat encourages volunteers who wish to assist with translating the principles to contact us.


Making Progress on Impact Reporting


During Q2, the Working Group on Impact Reporting for green bonds produced suggested metrics for reporting on Clean Transportation Projects in addition to metrics for Waste Management and Resource-Efficiency Projects published earlier in the year.


Similarly, the Social Bond Working Group developed a Harmonized Framework for Impact Reporting for Social Bonds including core principles and recommendations for issuers as they develop reporting processes. The document also provides a reporting template covering quantitative and qualitative information that issuers can adapt to their own circumstances.


Establishing Best Practices for External Reviews


Guidelines for External Reviews have been drafted by the Executive Committee and a dedicated Working Group in consultation with over 30 external reviewers. They are designed to contribute to the integrity of the Green, Social and Sustainability Bond market by providing further clarity on the role of external reviews. The Guidelines include (i) an updated typology of external reviews, (ii) ethical and professional standards and (iii) organisation and content.


In addition, an External Review Service Mapping Template and an accompanying User Guide have been made available to assist External Reviewers in providing market participants with clear information on the range of services offered as well as the context and content of the final external review report.


Mapping to the Sustainable Development Goals


Although not designed as a framework for investments, the Sustainable Development Goals (SDGs) launched in 2015 by the United Nations and adopted by 193 countries, have been proactively embraced by the investment community as a means of additional evaluation to track the Environmental, Social and Governance (ESG) impact of investments. In response to this trend, a High-Level Mapping of the Principles to the SDGs has been published. At this stage, 15 out of the 17 SDGs have been identified as relevant to Green, Social or Sustainability Bond eligible project categories. A spreadsheet supplement was released alongside the guide which contains a more detailed listing of the SDG targets mapped to the GBP and SBP.


Investors Feedback


The Research Working Group launched by the Exexcutive Committee in Q1 2018, has published the results of its inaugural survey undertaken in Q2 which targeted the buy-side to extract patterns of investor behaviour in the green, social and sustainability bonds market. The survey found that 68% of investors will not account for a bond from pure plays as green, social or sustainable, if not aligned with the Principles. Read the full Summary of Investor Survey published on the Resource Centre.


Executive Committee Elections


During the month of June, the annual election was held to renew one-half of the Executive Committee members, i.e. 12 seats, representing 4 organisations from each category (issuers, investors and underwriters). The Secretariat registered 109 ballots from almost 70% of the member and observer community, resulting in the following 2018/2019 Executive Committee composition:

Investors   Issuers   Underwriters

Members in blue were elected for a 2-year term ending at the AGM in 2020. Members in black will be up for re-election in 2019.


GBP/SBP Membership


The Secretariat welcomes the following new members of the Principles: Mitsubishi UFJ Morgan Stanley Securities Co, Bayerische Landesbank and Shinsei International Limited in the underwriter category; PIMCO Europe, SEB Investment management in the investor category;  Asian Development Bank and Fannie Mae in the issuer category. New observers include Hong Kong Quality Assurance Agency, Mikro Kapital, Zhong Lun Law Firm, The Carbon Trustics Group, Hong Kong Investment Funds Association, Institute for Global Environmental Strategies, Japan Securities Dealers Association and Revalue.io.

As of 30 June 2018, the GBP/SBP now has 289 members and observers from over 35 countries.


Job Alert


The Secretariat is hiring! We are seeking an Associate to provide general support for the administration and management of the Principles. The position may be based either in London or Paris. Applications should be received by 31 July 2018.
View full job listing and application details.



European Action Plan on Sustainable Finance


The European Commission announced on 13 June the establishment of the Technical Working Group on Sustainable Finance (TEG) that will be making proposals in relation to the priorities of its Action Plan on sustainable finance. The main tasks of the group are indeed to assist the Commission in the development of:


  • an EU taxonomy of environmentally sustainable economic activities

  • an EU Green Bond Standard

  • a category of "low carbon" indices for use by asset and portfolio managers as a benchmark for a low carbon investment strategy

  • metrics allowing improving disclosure on climate-related information.


ICMA, represented by Nicholas Pfaff, has been nominated on the TEG following a highly selective process. ICMA will be particularly focused on representing the GBP/SBP and the market in discussions concerning the EU Green Bond Standard and the future taxonomy.

In addition to ICMA, the members of the group represent a wide variety of financial and economic actors as well as non-governmental agencies and academics. Several European and international institutions have also been invited as members or observers to the group including representatives from the European Supervisory Authorities, the European Central Bank, and multilateral development banks such as the European Investment Bank and the European Bank for Reconstruction and Development.

The TEG held its first meeting on July 5th in Brussels with ICMA’s active participation in the confidential discussions. The TEG’s mandate will run until 30 June 2019, with possible extension until the end of 2019.



Q2 Market Highlights


For the fourth time, the French Sovereign tapped its Green Bond maturing in 2039. The €4bn tap in June 2018 is the first re-opening of the French OAT via syndication and takes the total outstanding amount to €14.8bn, the largest green bond in the market.


Also, in June, the market saw the first ever liability management transaction on a green bond when QBE Insurance completed a tender offer on its outstanding US$300m 3% Oct-2022 Green Bond issued in 2017. The issuer completed the tender of US$100m of the bond at 97.75.


Fannie Mae announced its decision to formally align green MBS issuance with the GBP, confirmed by a second opinion from Cicero. It positions Fannie Mae as one of the largest issuers.


The first green bond from a New Zealand issuer was brought to market by Auckland Council in June. To accommodate for the strong investor demand, the transaction was increased in size from a target of NZ$150m to NZ$200m (US$137 m).


The Chinese central bank, People’s Bank of China, plans to expand the guarantee scope of its medium-term lending facility (MLF) to include new types of guarantees including green bonds. The MLF is used to manage short and medium-term liquidity in the banking system in China.


Green Covered Bonds - Spotlight


After Berlin Hyp issued the first green covered bond in 2015, the market has seen only a modest rise in issuance. However, green covered bonds issuance increased sharply in H1 2018. A recent S&P Global Ratings report addresses What's Behind The Rise In Green Covered Bond Issuance? The report indicated a “significant growth potential for the green covered bond market thanks to continued efforts to improve the identification of the green assets in bank lending, legislative initiatives to improve transparency and disclosure around green lending, and the expansion of the covered bond model to new asset classes." One example of an initiative driving the growth of green covered bonds is the Energy Efficient Mortgages Initiative (EeMAP), which aims to offer mortgage incentives for the purchase of green buildings or energy efficiency improvement of existing buildings. On 14 June, 37 European banks committed to test the implementation of a new green mortgage scheme. The Pilot Scheme is expected to last at least two years.


Luxembourg has become the first country in the world to introduce a law on green covered bonds by creating a legal framework with clear criteria and standards that will increase the confidence of potential investors in a new category of covered bond linked to renewable energy projects.


Highlights from the 4th GBP/SBP AGM and Conference


The 2018 Green and Social Bond Principles Annual General Meeting and Conference, was held on 14 June in Hong Kong, co-hosted by ICMA and the Hong Kong Monetary Authority (HKMA) and additionally sponsored by the Hong Kong Financial Services Development Council (FSDC). It was the first time that the event was hosted outside Europe and it achieved record interest with close to 1,000 delegates registered, well in excess of 2017. Speakers included the Hong Kong Financial Secretary, the CEOs of HKMA, HSBC, and the Loan Market Association, the Chairman of Hong Kong FSDC, CFO of the World Bank Group, and Chief Executive of ICMA. There were 39 further senior speakers representing major market participants and stakeholders globally. Discussions revolved around the latest innovations and updates to the Principles, prominent market themes, and the importance of emerging green and social classifications or taxonomies as a complement to the GBP & SBP.



View photos from the event.


Latest Publications


The Green Bond Principles (GBP) 2018


The Social Bond Principles (SBP) 2018


The Sustainability Bond Guidelines (SBG) 2018


Questions and Answers 2018 update


Suggested Impact Reporting Metrics for Clean Transportation Projects - June 2018


Working Towards a Harmonized Framework for Impact Reporting Social Bonds - June 2018


Guidelines for Green, Social and Sustainability Bonds External Reviews - June 2018


External Review Service Mapping Template, User guide and Overview of the External Review Service Mapping


Green and Social Bonds: A High-Level Mapping to the Sustainable Development Goals and spreadsheet supplement


Summary of Investor Survey among GBP/SBP Buy-Side - Members & Observers - June 2018


Summary of Green - Social - Sustainable Bonds Database Providers - June 2018


Summary of Green - Social - Sustainable Fixed Income Indices Providers - June 2018


Events & courses


The Sustainable Investment Forum North America
New York, 26 September 2018

ICMA Training Course: Introduction to Green Bonds
London, 1-2 October 2018
This two-day course from ICMA gives a thorough and practically oriented introduction to the essentials of green bonds. While focusing on green bonds the workshop also looks at developments in the social and sustainable bond markets.
Further dates in other locations to be announced.

Annual ICMA and JSDA Joint Conference: Developments in the green and social bond markets – the Asian perspective
Tokyo, 11 December 2018
The Tokyo conference will bring together issuers, underwriters, investors, policymakers, market infrastructure and service providers who are active in the Asian green and social bond markets to review recent developments in Asia including government regulatory initiatives and to consider what is needed to encourage further issuance and mainstreaming in these markets.



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