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The Green Bonds Principles are a set of guidelines for issuers of green bonds issued in January 2014 and updated in March 2015. The Principles include recommendations for improving the transparency of the rapidly growing market for green bonds - which can include any bond designed to raise money for environmentally beneficial purposes.
Four banks worked together to draft the Principles: Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank and JPMorgan Chase (see Citi press release). The initial 13 signatories to the Principles included these four as well as BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB. Many more banks, as well as bond issuers and investors, have now announced their support of the Principles - see the list here.
BankTrack has engaged with the Principles, coordinating open letters on their initial launch and again on their first update.
- The initial letter (April 2014) called on the banks to revise the Principles to take the form of genuine commitments rather than broad recommendations; to tackle the issue of what can and cannot be considered ‘green' head on; and to match their commitment to the Principles with commitments to rapidly phase out finance for fossil fuels.
- The second letter (April 2015) reiterated these points, and also raised concerns regarding the gap between the stated aims of the Principles to increase transparency and disclosure, and the recommendations of the Principles "which explicitly allow and provide for important information on green bonds to remain under wraps". The GBP Executive Committee sent a response to this letter, here.
In June 2014 we published an opinion in Environmental Finance magazine (subscription only - also published as a BankTrack blog) highlighting a "green bond" issue set to finance the destructive Jirau dam in Brazil.
BankTrack has also become an Observer of the Principles, in order to provide input to updates to the Principles. In September 2014 we provided a submission to the consultation on the revision of the Principles, as well as releasing a Green Bonds Fact Sheet, together with International Rivers and Friends of the Earth.