Sustainable Insight: Gearing up for green bonds

Gearing up for green bonds

This edition of Sustainable Insight provides KPMG’s guidance on the process of issuing a green bond.

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Green bonds are an increasingly attractive mechanism for both public and private sector organizations to raise capital to fund projects with an environmental benefit, such as renewable energy, low carbon transport and forestry projects. Green bonds did not exist eight years ago, but fast forward to 2014 and the value of green bonds stood at over US$53 billion outstanding.

In a fast-growing market, challenges can arise as organizations assess whether issuing a green bond is the right course of action for them and seek to understand the process involved.

Gearing up for Green Bonds addresses five key questions that clients typically ask KPMG member firms, including:

  1. Should we label our bond 'green'?
  2. How do we define what makes the bond 'green'?
  3. What should we report on after issuing the bond?
  4. What type of external assurance should we seek?
  5. How can we avoid accusation of 'greenwash'?

The paper provides readers with an overview of evolving green bond frameworks and standards including the Green Bond Principles, Climate Bonds Standard and green bond indices. It provides practical advice on defining a green bond, choosing the right level of external assessment and protecting the issuer’s reputation and the credibility of the green bond.

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