Free content

On the eve of the G20 summit in September, the US and China formally ratified the Paris Agreement, boosting the chances it will become international law before the end of the year. At least 55 countries accounting for 55% of global emissions must ratify the treaty for this to happen. With China and the US accounting for 38% of global carbon emissions between them, the announcement was a major step forward for the agreement.

The Asian green bond market has gone from being a minnow a year ago to dominating global issuance, proving that the product is here to stay. But with no real pricing advantage and the investor base still largely traditional, there is plenty holding back a shift towards growth and sophistication writes Rashmi Kumar.

China is where it's at in green finance in 2016. Its brand new domestic green bond market has zoomed to be the world's biggest in no time, and it has become the first country to produce a comprehensive plan for greening all aspects of finance. Mutual investment between China and the West is set to rise, though some have qualms about funding 'clean coal', reports Julian Lewis.

After a sluggish start, Latin American green bond activity is picking up. But for green financing to really gain influence, it needs to continue its progress in domestic markets. Olly West reports.

The Paris Agreement has set the direction for action to ward off devastating climate change. That should mean investment capital now knows where to go. But big political risks remain: the US might back out, governments could drag their feet. Finance is on the starting blocks — it just needs the track laid out in front of it. Jon Hay reports.

Green bond issuance in 2016 had by the end of August already overtaken the whole year’s total for 2015, setting another record for yearly growth. The magic $100bn of annual volume is still a little way off, but could be boosted by new types of issuers entering the fray. Craig McGlashan reports.

This year’s update to the Green Bond Principles has both expanded the scope of the market’s voluntary code, bringing in broader social bonds, and tightened it, by ruling some pure play transactions offside. The ‘use of proceeds’ concept is key to both developments, says Julian Lewis.

The African Development Bank, European Investment Bank, International Finance Corp and World Bank originally distributed the Harmonised Framework for Impact Reporting in green bondsto investors in March 2015. But its public version only emerged last year after seven more SSAs had joined the initiative in September.

With Standard & Poor’s now poised to follow Moody’s arrival this spring, the rating agencies are scrambling to carve out a space for themselves in a green bond market that is used to relying on other sources of independent opinion and verification, reports Julian Lewis.

Morningstar’s ‘Five Globes’ assessments of equity and corporate bond funds have brought environmental and social factors into focus in the fund world. Julian Lewis lifts the lid on the rating group’s approach and partnership with Sustainalytics.

Institutions have spent months preparing for the launch of the new IMF special drawing rights (SDR) basket on October 1 since the decision to include the RMB was made last year. The mechanics include managing divergent onshore and offshore rates, Jukka Pihlman, global head of central banks and sovereign funds, Standard Chartered, and former IMF official, told GlobalRMB.

Moody’s move to junk Turkey's rating last Friday was met with howls of disdain from investors after they believed the agency had hinted there would be no downgrade. But no diligent fund manager should be moving positions based on a throwaway comment from a single analyst.