Bond experts to discuss the future of the rapidly emerging green bond and Sukuk sector at GEFF
The Global Ethical Finance Forum (GEFF) to be held in Edinburgh on the 1st and 2nd of September will feature the first global conversation of experts on the nascent yet rapidly growing green bond and Sukuk sector and how corporations can benefit from this marketplace.
The green bond and Sukuk market has witnessed exponential growth and dynamism over the past few years, in large part due to the pivotal role of organizations such as the World Bank, European Investment Bank (EIB) and Kreditanstalt für Wiederaufbau (KfW) among others.
According to the Climate Bonds Initiative, Green bonds ‘fund projects that have positive environmental and/or climate benefits. The majority of the green bonds issued are green “use of proceeds” or asset-linked bonds.’
Green bond issuances have risen from $36.6 billion at the end of 2013 to $53.2 billion by the end of 2014 issued by 73 different issuers. Among the world’s biggest issuers are the World Bank and the European Investment Bank (EIB).
The World Bank, one of the originators of green bonds, issued $3.1 billion in 2014. These bonds were met with robust demand multiples by investors as they provide positive returns while keeping environmental factors in consideration.
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Another key market player, the EIB, continues to be a prolific issuer of green bonds and ended 2014 as the world’s top issuer, with $5.6 billion green bonds issued in 2014.
Reuters projects that in 2015 alone, companies will issue a record $30 billion in green bonds, in large part due to growing demand from investors who seek a positive impact and factor sustainability and environmental issues in their investment decision making.
Despite the phenomenal increase in green bond sales, commonly agreed standards on what constitutes a green bond, as well as transparency over how proceeds are used, are still in debate and constitute a hurdle for green bonds going mainstream. This subject will be the one of the many areas to be covered at the Global Ethical Finance Forum, this September in Edinburgh, Scotland, UK.
The Islamic finance industry has also shown keen interest in the closely aligned socially responsible investment sector when it supported the issuance of the popular issuance of the $500 million International Finance Facility for Immunization (IFFIM) Sukuk and the MYR 100 million SRI Sukuk to fund schools by Khazanah Nasional, the sovereign investment fund for Malaysia.
The forum will include a panel headed by Usman Hayat, Director of Islamic Finance and ESG, CFA Institute who will lead a discussion with experts in the industry such as Michael Bennett, Head, Derivatives and Structured Finance, World Bank; Nathalie de WEERT, Senior Capital Market Officer, Euro Capital Markets, European Investment Bank; Datuk Dr. Mohammed Daud Bakar, Founder and Group Chairman, Amanie Advisors; Marco Lichtfous, Partner – Advisory & Consulting, Deloitte; and Richard de Belder, Partner, Dentons. The session will feature discussions on the size of the addressable market and the potential growth of green bond issuances particularly in emerging markets, promoting the development of international standards for the green bonds market and finding the right interpretations of what constitutes a green bond and a Sukuk.
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