“We need to reach $1 trillion in green bonds by 2020”, says former UN climate chief

Christiana Figueres, the UN’s former climate change chief, who helped negotiate the Paris Agreement, has called on cities, governments and businesses to massively increase their investments in the green bond market.

Speaking at the annual Climate Bonds Initiative conference in London, Ms. Figueres said the financial sector should be aiming “to reach 1 trillion investments in green bonds by 2020” and that “the decarbonisation of the economy has to happen as soon as possible”, according to reports.

She was attending the event to launch a new Green Bond Pledge, which binds signatories to work towards a strategy which uses green bonds to make infrastructure and capital projects climate resilient.

“When green investments move from business plans into budgets and balance sheets a wealth of opportunity will be unlocked across the value chain. Organizations committing to the Green Bond Pledge will benefit from these opportunities and help the necessary acceleration of capital flows - before 2020 - to deliver a sustainable future for everyone.”, she said.

The pledge has been developed by a range of international climate finance and sustainability groups, including CDP, Ceres, NRDC, and California's Governor's Office.

The current green bonds market stands at $155 billion, but is predicted to increase to at least $200 billion by the end of 2018. The aspiration to reach $1 trillion would, therefore, mean a five-fold increase in the market within two years.

                           Ms. Figueres made the remarks in London this week

Patricia Espinosa, who took over from Ms. Figueres as Executive Secretary of UN Climate Change said that green bonds “are among an array of exciting and rapidly growing, new financial instruments” which can help meet the goals of the Paris climate agreement.

“I warmly welcome the Pledge as one among many inspiring new initiatives that will launch climate action in 2018 to the next level of ambition”.

Mindy Lubber, CEO and President of the investor-focussed NGO, Ceres, also commented: "We (have) sent a clear message that infrastructure and capital projects of all kinds must address environmental issues and climate risk and that green bonds are an ideal financing vehicle when such projects need to be financed in the debt market. By delivering on this simple ask, we will continue to develop a critical market that will support investors and other capital market leaders in mitigating the impacts of climate change." 

 

Photo Credit: Farzaan Kassam