Ongoing dialogues with relevant stakeholders
The CBI’s role in defining a robust taxonomy and standards for green bonds is based on feedback from working groups comprising investors, scientists, supranationals, NGOs and banks. As a result of these ongoing dialogues, the CBI helps keep the market informed and ensures it evolves along a healthy pathway to a greener world.
Source: Climate Bonds Initiative
In fact, in December 2019, the CBI launched its third version of the international Climate Bonds Standard which is designed to ensure compatibility with the new EU Green Bond Standard (GBS) and the latest version of the Green Bond Principles (GBPs) by strengthening green definitions and disclosure requirements.
The findings of the CBI contain valuable insight for green bond issuers. For example, in a recent survey conducted by the CBI and co-sponsored by Lyxor, European investors expressed a high interest in corporate issuers from the Energy, Utilities and Industrials sectors. Like it or not, major emitters and polluters from these sectors have a critical role to play in achieving the European Climate Foundation’s target of net zero greenhouse gas emissions by 2050. Urgently engaging with these companies to consider more green bond issuances will be critical. Shunning them isn’t the answer, but investing in their bonds could be.
Chart source: Climate Bonds Initiative, Green Bond European Investor Survey 2019
So whatever the nature of the issuer, investors can invest in their green bonds with a clear conscience, knowing that their proceeds will only be used to fund pro-climate projects and assets. The CBI’s consensus-backed standardisation and its strict taxonomy help pave the way for passive investments, and address the risk of ‘greenwashing’, where investments are made to seem more climate-friendly than they are. At Lyxor, only green bonds approved by the CBI are eligible for inclusion in the underlying indices of our green bond ETF range.