NEW SOURCES OF SUSTAINABLE FINANCING GREEN AND SUSTAINABILITY

NEW SOURCES OF SUSTAINABLE FINANCING GREEN AND SUSTAINABILITY BONDS MARKET Justine Leigh-Bell, Deputy CEO, Climate Bonds Initiative

The Green Bond Market is Diversifying USD 167 bn total issuance in 2018; Over USD 500 bn in total Over 1, 500 green bonds issues 44 countries, 8 new, all continents 320 issuers (204 new) The rise of new labels: Sustainability, SDG and social bonds USD 40 bn in 2018

Billions Green bonds: Use of proceeds is diversifying 0% 0% ICT 0% Industry 0% Adaptation 0% Land Use 0% Waste 0% Water 0% Transport 0% Buildings 0% Energy 0% 2013 2014 2015 2016 2017 2018

Green, Social and Sustainability bonds feature • • Use of proceeds Management of Proceeds Reporting External review

Consistent rules support market growth Regulators now providing guidance Voluntary rules drove early market growth, allowed global consistency

Climate Bonds Taxonomy

EU Action Plan on Sustainable Finance Clarifying investor fiduciary duties Director responsibility for long-term sustainability planning Financial advisors to take into account sustainable preference of clients Integrating sustainability in ratings Green supporting factor sustainability in prudential requirements Sustainability benchmarks - TEG Green bonds standard and Eco-labels for retail - TEG Climate risk disclosure - TEG EU “Taxonomy” for sustainable activities - TEG

The core principles of the EU taxonomy

Role of Development Banks to support green bond markets

Outlook Green infrastructure investment pipelines Blended finance: structures that allow private investors to manage risk More sovereign issuance from developed and emerging economies Progress on common international standards and definitions for green bonds. Regulators will keep innovating with more guidelines, regulations and incentives being put in place. Investor demands on the largest corporate emitters to demonstrate more brown-togreen financing to help meet Paris targets. More banks need to lead on green bonds, green loans, green mortgages and other retail and corporate banking and investment product.