Overview
Global ESG bond scale is smaller than ESG securities. ESG bond investors pay more attention to whether the issuer can repay the borrowings, while ESG securities investors value the future growth ability of investees. In terms of engagement, ESG bonds do not have voting rights and have weaker impacts than securities.
Whether they are green bonds, sustainable bonds or sustainability-linked bonds, they must comply with the ESG framework in terms of classification, issuance and disclosure. The International Capital Market Association has proposed a variety of ESG bond standards, and various jurisdictions are also forming their standards.
ESG Bonds Classifications
There is no universal classification method for ESG bonds. Common ESG bonds include green bonds, social bonds, transition bonds, blue bonds, sustainable development bonds, and sustainable development linked bonds.
Green bonds have the highest proportion in ESG bonds, and common green bonds include Use of Proceeds bonds, Use of Proceeds Revenue bonds, project bonds, securitization bonds, etc.
ESG Bonds Regulations
The biggest feature of ESG bonds compared to conventional bonds is that the issuer needs to disclose the purpose of the funds for investors to determine whether the bonds meet greenwashing.
Global regulators are formulating policies for the fundraising, issuance, and information disclosure processes of ESG bonds, among which the EU green bond regulation is relatively mature.
Introduction to the Climate Bonds Taxonomy Released by Climate Bond Initiative
This article introduces the Climate Bonds Taxonomy released by Climate Bonds Initiative
Introduction to Six Types of Green Bonds
This article refers to the green bonds from the World Bank and the Climate Bonds Initiative
Australia Issues First Government Green Bond
The Australian Office of Financial Management issues its first government green bond
Climate Bonds Initiative Releases Hong Kong Sustainable Bond Market Report
The Climate Bonds Initiative releases a report on Hong Kong sustainable bond market
International Capital Market Association Releases Recommendations on EU Green Bond Regulations
The International Capital Market Association releases a response document aimed at providing recommendations on EU green bond regulation
Introduction to Seven Types of ESG Bonds
This article introduces seven types of ESG bonds in the market, including green bonds, social bonds, transition bond and blue bonds
International Capital Market Association Releases Asian Sustainable Bond Market Report
The International Capital Market Association releases the Asian sustainable bond market report
European Securities and Markets Authority Releases Consultation Paper on European Green Bond Regulation
The European Securities and Markets Authority releases consultation paper on European Green Bond Regulation
Canada Issues World’s First Green Bond to Include Nuclear Energy
Canada has successfully issued its second green bond, which is also the world’s first green bond to include nuclear energy
Goldman Sachs Asset Management Launches World’s First Green Bond ETF
Goldman Sachs Asset Management launches the world’s first green bond ETF