International Conference on Climate Finance and Green Bonds: summary

Madrid, 18 July. SUST4IN, in collaboration with ICEX Spain Trade and Investment,  has organized the conference “Climate finance instruments: opportunities around green  bonds” in order to provide first-hand information on innovative climate finance instruments  and specifically green bonds, with practical cases.

The session was opened by the Director of Business Internationalisation ICEX, Isaac  Martin Barbero, who has underlined that “this financial instrument combines technical excellence with more financial innovation, with benefits to the issuer, to the investor and to the companies”. The founder and CEO of SUST4IN, Marcio Viegas, meanwhile, has said that “green bonds are the the fastest growing climate finance instrument. And best, for issuers, there is more demand than supply.”

The conference had speakers from national and international key financial sector reference organizations such as the Climate Bonds Initiative and companies that have explained the basics about these new instruments and especially the opportunities and advantages offered to the Spanish business sector. The CEO and co-founder of the Climate Bonds Initiative, Sean Kidney, has stressed that “we have a huge global challenge with a solid foundation for growth in several energy-related and environmental sectors.”

The session was closed by the Director for Infrastructures, Health and ICT, Jorge Alvar, who has reviewed the main points discussed throughout the day.

Participating delegates have been mainly from for sustainability, business development, and financial departments of companies working in a variety of sectors in which these instruments have potential, including banking, insurance, infrastructure, ICT, energy, tourism and so on.

Climate resilience

The World Economic Forum estimates that by 2020 $5.7 trillion annual investment will be needed to carry out the transformation to a low emissions scenario. The investments necessary to increase climate resilience offer investment opportunities in all asset classes, sectors, industries, countries and currencies.

The focus on climate finance, also driven by the Paris Agreement, will catalyze the interest in new instruments such as green bonds, created to increase the investor base around projects to tackle climate change, and already they have attracted a significant appetite from investors and issuers, which are diversifing and expanding them in many parts of the world.

Green bonds is one of the ways in which large corporations, banks and even cities finance projects for reducing emissions, environmental impact and carbon footprint using the proceeds to finance renewable energy, energy efficiency, clean transport or wastewater treatment, among others.

The potential for Spanish companies is enormous: in addition to the capital increase directed towards the implementation of green projects that will generate these instruments, there is a great demand for green bonds ( most issuances have been oversubscribed) which has advantages such as the ability to access a wider range of investors, improved corporate image and reputation of the issuer, and reducing the cost of capital, given the growing interest of foreign investors towards green investments. It is expected that green bonds, whose growth has been exponential (reaching $41.8bn in 2015) to become a key tool and attract more attention since the reduction targets agreed emissions in Paris will need trillions of dollars in capital public and private sectors.