What happens when green bonds get polluted?

How green should a green bond be? Should the company issuing the green bonds have to be green itself, or is it enough that the projects that the bonds are funding are of a hue most verdant? And just how green are those projects they are funding?

  • By Nigel Owen
  • 20 Sep 2018
Email a colleague
Request a PDF

Car makers have often found themselves in the crosshairs of green bond critics. Some green investors have targets for the impact on carbon reduction by the green project the funding will support. Those investors do not buy car maker green bonds as they do not judge the issuance supporting the production of hybrid vehicles to be green enough.

The hybrid vehicles may reduce the fossil fuel the car burns, but the electric power has to come from somewhere and quite often that is from a fossil fuel burning power station fuelling the national grid.

But again, there are investors who will argue that as power networks are weaned off fossil fuels and on to renewable sources, the technology in those cars will naturally become greener. So the car companies should be supported in their efforts.

But what if that same car company is found to have suppressed the development of technology which could reduce the emissions of its vehicles immediately? That is what Volkswagen, an issuer of green bonds, is being investigated for by the European Commission. If it is found guilty, surely any green bonds the company has issued should immediately have their green status revoked and any investor that wants to retain its green investment credibility should divest its holdings.

If green bonds and their issuers are to retain any credibility, they should not be allowed to be polluted. The investors should be investigating that, not the EC.

  • By Nigel Owen
  • 20 Sep 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 344,234.82 1335 8.11%
2 JPMorgan 339,975.37 1458 8.01%
3 Bank of America Merrill Lynch 303,833.99 1046 7.15%
4 Barclays 256,068.68 961 6.03%
5 Goldman Sachs 226,910.60 765 5.34%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 46,845.71 193 6.57%
2 JPMorgan 45,135.56 102 6.33%
3 UniCredit 38,938.98 167 5.46%
4 Credit Agricole CIB 36,300.56 179 5.09%
5 SG Corporate & Investment Banking 35,514.25 137 4.98%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 14,088.48 62 8.97%
2 Goldman Sachs 13,469.15 66 8.58%
3 Citi 9,948.21 58 6.34%
4 Morgan Stanley 8,572.10 54 5.46%
5 UBS 8,391.04 36 5.34%