11 Dec 2017

NZX offers fresh advice to grow green bonds market

3:09 pm on 11 December 2017

Markets operator NZX has issued some fresh guidance to help grow the size of the green bond market.


NZX Photo: NZX / Supplied

Green finance has been around for nearly a decade, but the global growth in the issuance of green bonds has more than doubled in the past two years to $US103.3 billion in 2017 ($US41.8bn in 2015, $US81.6bn 2016).

Green bonds are primarily used to finance or refinace climate-friendly or environmental projects.

A report from Responsible Investment Association Australia indicates green investments have more than quadrupled over the past three years to $A622bn in assets under management in 2016, with nearly half of managed assets invested through some form of responsible investment.

The increased demand reflected the changing global environment and investor interest in a business's long-term strategic view and commitment to sustainable development.

The NZX's guidance was intended to help New Zealand companies issue investment-grade green bonds, as those with high scores for environmental, social and governance factors (ESG), outperform those with lower scores.

The guidance helps companies explain ESG to investors, with recommendations and resources for reporting financial and non-financial information, targets, risks and measurable outcomes.

The NZX's guidance on green bonds has been issued as an add-on to the new corporate governance code, which can be found on its website.