Investment Banking News

Green bonds: part of super industry’s decarbonising tool set

Posted by Anton Murray Consulting on . Posted in Investment Banking News

Investment Magazine

Expanded ‘green’ criteria is set to unleash a wave of new green and ‘transition’ bonds from across Australian industry as companies and superannuation funds leverage markets to help fund their 2050 Net Zero targets. Waste and residential property sectors are set to join banks, property developers, renewable energy players and state governments in issuing ‘green’ debt ring-fenced for decarbonising projects, while big polluters are looking closely at using ‘transition’ bonds to assist their decarbonising process. Michael Chen, head of sustainable finance at Westpac Institutional Bank, said the Climate Bonds Initiative’s recent definition expansion means investors will soon have access to green debt beyond that of the existing oversubscribed ‘low-hanging fruit’.

“Now that we’ve got good, specific, globally accepted definition of what green looks like in the waste sector, I expect we’ll see some issuance there,” said Chen, adding residential property is not far behind. Chen also said big energy companies, as well as steel, aluminium, manufacturing and chemical companies are looking at the ‘transition’ format closely. “Now they’ve got transition guidelines and definitions for what a ‘transition bond’ might look like we’ll likely see some more issuance from those emissions intensive companies.”

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