Sustainable Prosperity’s 2013 Report Found Canadian Market for Bonds with Ecological Benefits Valued at $5.7 billion
Sustainable Prosperity welcomes Ontario’s announcement – made as part of yesterday’s Fall Economic Statement – that it will be issuing green bonds to fund environmentally-friendly infrastructure in the province.
Ontario, as the first government in Canada to announce such plans, is showing real leadership and innovation in the use of a financial instrument that SP believes has real promise to help transition our society to a stronger and greener economy.
Sustainable Prosperity has surveyed the green bonds market over the past two years, in collaboration with its partners at Climate Bonds, Inc. and UK-based bank HSBC.
The 2013 Canadian Companion to the global report issued by HSBC, which SP released in September, forecast “strong interest in climate-resilient infrastructure” as a driver of green bond market activity. SP’s survey found a total of $5.7 billion in green bonds had been issued by Canadian companies and institutions.
Alexander Wood, SP’s Senior Director of Policy and Markets, said: “Based on our recent survey of green bonds markets, we know that a growing number of institutions and businesses are using green bonds to fund investment in activities that deliver positive economic and environmental outcomes. Ontario’s announcement today confirms that trend”.
Green bonds are broadly defined as fixed-income securities that raise capital for a project with specific environmental benefits. Most green bonds issued to date have been climate bonds, where the proceeds go to climate mitigation or adaptation efforts.
While details on the exact term and size of Ontario’s green bond offering are not yet available, Sustainable Prosperity expects that the green bonds issued by the government of Ontario will follow emerging standards for determining the sustainability of the investments they finance, and will provide for robust and transparent certification of those investments. In particular, we expect that the government will ensure clear “ring-fencing” of investments made from green bond proceeds from other general purpose bond revenues, so as to ensure the credibility and viability of the market for these important instruments.
About Sustainable Prosperity
Made up of business, environment, policy and academic leaders Sustainable Prosperity is a national green economy think tank/do tank. We harness leading-edge thinking to advance innovation in policy and markets, in the pursuit of a greener, more competitive Canadian economy. At the same time, we actively help broker real-world solutions by bringing public and private sector decision-makers to the table with expert researchers to both design and apply innovative policies and programs.
Read Sustainable Prosperity’s 2013 Companion to the Global Climate Bonds report here.