The Green Bond Principles (GBP) are voluntary process guidelines that provide recommendations on transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the method for issuance of a Green Bond. The GBP set a standard and clear process and establish an information disclosure framework for issuers, so that investors, banks, underwriters, placement agents and others have a better understanding of the characteristics of any given Green Bond.
Green Bond
Green bonds aim to finance for projects that can help address climate change. Green bonds can be issued by governments, banks, municipal institutions or corporations. Green labels are applicable to the debt instruments in any format, including Private Placement Bond, Asset Securitization, Secured Bond and Sukuk. The objective of green bonds is to provide funds to the projects that have positive environmental or climate change related benefits. The majority of issued green bonds or proceeds were used for ‘Green’ purpose or linked with ‘Green’ assets. China has always been playing a pivotal role as a major participant in the global market of green bonds. Up to June 2018, the total bonds from climate-related bonds issuers in China were equivalent to USD289 billion and in Hong Kong USD4.3 billion, which reflected the potential of issuing green bonds in the realm of transportation, energy and water. In next 5 years, loads of climate-related bonds will be expired, which means that there is an enormous market for green bonds.
Green Bond Principles
It is highly recommended that with respect to the issuance of a Green Bond or a programme, issuers need to appoint (an) external review provider(s) to confirm the alignment of their bond or bond programme with the four core components of the GBP:
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Use of Proceeds
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Process for Project Evaluation and Selection
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Management of Proceeds
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Reporting
Interpretation of Green Bond Principles & Certification Process
Source：Climate Bonds Initiative（2019）– https://www.climatebonds.net/
Relying on its years’ experience in sustainability industry and talent pool, GreenCo ESG Advisory Limited is versed in Assurance engagements other than audits or reviews of historical financial information – ISAE 3000, Quality Management System – ISO 9001 and Greenhouse gases — Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition – ISO 14065, and has rich experience in practical operations of the application of these guidelines and standards. We are fully capable of adhering to the four core elements in Green Bond Principles, providing issuers with guidance on the key components involved in launching a credible Green Bond, assisting our clients to identify, analyse, evaluate and organize data about the projects and assets that align with the low carbon and climate resilient development concept, and helping issuers to obtain the Certification of relevant green bonds by offering complete advisory services.
GreenCo ESG Advisory Limited has strong capability to provide issuers with advisory services in the issuance of green bonds, assisting issuers to seek certification ahead of issuance, and to meet post-issuance requirements, which need to be followed by issuers who are to seek continued certification after the issuance of the bond in a standard manner according to the latest requirements of Climate Bonds Standard, Sector-Specific Criteria that provides detailed eligibility criteria for different sectors, and Green Bond Principles. Specifically, we are committed to ensuring that the issuer prior to issuance of the green bond has established appropriate internal processes and controls, and that these internal processes and controls are sufficient to enable conformance with the Climate Bonds Standards after the bond has been issued and allocation of the proceeds is underway, and the issuer at the post-issuance phase has consistently been in line with the requirements of Green Bond Principles and other realted standards in terms of Nominated Projects & Assets, Use of Proceeds, Non-Contamination of Proceeds, Confidentiality, Technical Criteria, etc.
GreenCo ESG Advisory LimitedGreen Bond Advisory Service
Scope of Green Assets & Projects
The key charateristic of green bonds is that the proceeds will be exclusively applied to green assets or projects. GreenCo ESG Advisory Limited can assist our clients in the issurance of green bonds by providing consulting services in many areas, including but not limited to:
Green Buildings & Infrastructure
Greening of existing buildings, including projects making significant improvements to the building envelope, energy and water facilities and energy metering.
Greening of new buildings includes the design, planning, construction, operation and maintenance of green buildings.
New and existing buildings meeting industry certification schemes, such as LEED, BREEAM, Miljöbyggnad, DNGB, EDGE, ENERGY STAR (BEAM Plus for Hong Kong’s Green Building).
Energy efficiency and conservation projects in buildings, such as the use of LED lighting installation.
Clean Transport
Mass transit (subways, rail, light rail, metro, monorail, tram, bus network) projects, including construction, equipment purchasing and technology upgrading.
Projects to improve energy efficiency of transportation systems.
Non-motorised transport projects, such as Bicycle and public walking infrastructure and schemes.
Zero- and low-emission vehicle fleets, such as electric vehicles (EVs), hybrids and hydrogen fuel cell vehicles.
Urban motor and electric public transport projects, such as charging stations for electric vehicles.
Industrial Efficiency
Industrial energy and water conservation projects for upgrading technology and process, equipment and facilities to reduce energy use, water use and pollutants. This includes cogeneration projects.
Circular economy projects that improve resource reuse, remanufacture and recycling.
Eco-efficiency improvements/cleaner production, such as for cement, iron, steel, glass production.
Facilities dedicated to manufacturing energy efficient components (such as motors, automation systems) and products (such as household appliances and equipment).
Pollution Control & Waste Management
Pollution prevention/circular economy activities (recycling, re-use, anaerobic digestion facilities, qualifying waste-to-energy plants).
Pollution control activities, including reduction of air emissions, greenhouse gas control, soil remediation, such as carbon capture and storage (excluded for fossil fuel energy).
Waste disposal activities (closed landfill facilities with gascapture).
Wastewater treatment and methane capture projects.
Sustainable Water Management
Clean water storage and management, such as irrigation and water conservation construction projects.
Water saving projects, such as improvement in urban drainage systems.
Wastewater treatment projects.
Prevention, control and adaptation to droughts and flood. River revitalisation and preservation, habitat restoration, and other forms of mitigation methods.
Defences and storm water management.
Ecological restoration projects, such as marine ecosystem conservation.
Sustainable Management of Natural Resources
Sustainable agriculture development projects, such as organic agriculture production, biological crop protection and drip-irrigation. Sustainable agriculture supply chain projects.
Sustainable animal husbandry, fishery and aquaculture.
Green forestry development projects, such as afforestation and reforestation projects.
Construction, operations and maintenance of biomass power generation projects.
Nature protection, ecological restoration and disaster prevention projects, such as ecosystem restoration, soil erosion prevention.
Sustainable Energy
Renewable energy (solar, wind, hydro-electricity, geothermal, biomass, tidal) generation projects, including production, equipment manufacturing, transmission, appliances, maintenance and products.
Energy storage projects (district heating, smart grids), including manufacturing, appliances and products.
Energy efficiency projects, such as in new and refurbished buildings.
Eco-friendly Products
Development and introduction of environmentally sustainable products, production technologies and processes, with an eco-label or environmental certification, resource-efficient packaging and distribution.
Others
Climate change adaptation activities, including information support systems, such as climate observation and early warning systems.
Terrestrial and aquatic biodiversity conservation projects, including the protection of coastal, marine and watershed environments.
