Justine, you joined the Climate Bonds Initiative (CBI) when there was only one other colleague alongside founder Sean Kidney. Could you tell us a bit more on how you got involved in climate bonds back in 2012?
I studied Molecular Genomics at Yale and Environmental Technology, Economics and Policy at Imperial College. After a couple years of consulting in climate policy for some of the global development banks and living 3 years in India, advising the Indian government on natural resource accounting, I wanted to move back to London and focus all my efforts on climate finance. A former imperial colleague connected me to Sean Kidney, founder and CEO of CBI and when he explained the vision and goals for the organisation and its mission on driving institutional capital towards climate change solutions, I immediately felt a positive “click”. I realised there was something truly interesting and meaningful to do in the climate bond market.
Today, 6 years later, we have moved offices twice, we are over 50 colleagues globally, and are in the process of opening up offices in China, India and Belgium.
What exactly does CBI do?
CBI is a non-for profit organisation, funded through various channels including government grants, foundations and philanthropies including a partnership program that consists of all the different types of market players (FIs, Investors governments etc.). We also receive sponsorships and provide green bond certification. We develop and promote the knowledge around the bond market with positive climate impact, better known to the general public as “Green Bonds”. As you can read in our report, Green Bonds can take many different shapes and forms. They are used from the financing or refinancing of climate related projects to more synthetic actions for corporations, municipalities or even entire countries.
We now have over 100 different partnerships with key institutions and stakeholders from around the world and are experiencing fast growth in emerging markets. For example we have expanded our teams across Latin America, India, South East Asia and China including new frontier markets such as Nigeria and Kenya. In Nigeria, we successfully completed a project together with the Nigerian government, supporting them in issuing their first sovereign Green Bond which has now led to a wider market development program in the country. We believe Nigeria is a driving force in terms of home-grown financial sophistication, innovation and leadership that can help lead other African nations to do the same. We are also now in the process of assisting other national governments in Latin America with the same ambitions.
You have seen an incredible growth in the business the last few years, how would you define it?
First is the explosion of the volume of Green Bond emissions. You will find all the numbers in the report below. One striking statistic is that when I started with CBI we certified 1% of the total worldwide issuance as Green Bonds. Now we’re certifying 30%!
Second is the global spread, we have now set up country teams in Brazil, China, India, South East Asia, Australia, and Africa. And for 2019 we are going to intensify our regional expansion even further.
However, the main challenge for a growing non-for profit business with all these successes is meeting the increasing demand while bringing in new funding partnerships to meet this demand. But this is a good place to be as an organisation and we look are embracing this growth phase.
Tell us more about corporate Green Bonds, how do they differ from sovereign initiatives and why do they matter?
Take the example of an oil company we have recently accompanied in their corporate GB emission – you can find the case study on our website.
To issue a Green Bond is showing your investors and shareholders that you’re not only addressing climate change, you have a long-term strategy for the future business.
And in my view when you are an industrial company transitioning towards a climate conscious strategy, this is exactly the message you need to get out to the market.
For Sovereigns, the opportunity is to match national climate policy commitments with their infrastructure planning that prioritises projects and assets that will address climate change. Green bonds and green bond programs are one way in helping to achieve this.
You are working closely with US municipalities to create cheaper access to borrowings with Green Bonds. What does this entail?
We have done a lot of work in the USA and will continue to do so in 2019. Our aim is to be disruptive – and creative – in how municipal finance gets done in the US that will truly scale up green bonds in the US.
We also want to be more vocal about the successes that are taking shape in key economic sectors, particularly in energy not underestimating the work that still needs to be done in transitioning. But currently wind and solar are sources of energy truly competitive with the conventional ones, most notably coal. Operational assets have the ability to back the issue of debt. Only a few years ago, that could not have happened. Clean energy Infrastructure is now beyond the project-finance-only stage and becoming very suitable for green bonds.
What are your plans for 2019?
We are very excited to be part of the creation of a European Union wide expert group on sustainable finance. The group will set a EU wide sustainable finance framework and new European green bond standards, with the support of a number of key stakeholders who have helped to drive the green finance agenda. This includes the leadership support of CBI.
We want to grow our capability to go into more regions and help build local capital markets for green. If you read our special report on Indonesia, you will discover projects where Green Bonds are being “plugged in” as a finance source and where the green infrastructure investment opportunities are in the country We still need to further develop access and nurture empowerment in Green Bond financing, particularly in the emerging markets where the greatest potential lies. We need to help both the public and private sector think outside the box with financial engineering, clever incentives and policies to help drive the deal flow towards green. The green finance market is an opportunity to be a competitive form of financing and potentially a cheaper option than regular bonds.
Personally, I want to keep the eye on the mission and continue to grow as a leader in this space.
We at CBI need to continue working on the delivery of the mission and spreading our story, in order to better inform the general public. Together we can influence governments to prioritise climate change and do more about it.
Find out more on the 2018 Bonds and Climate Change State of the Market Report by the Climate Bond Initiative at: