Green Bond Principles Governance Established; ICMA Appointed Secretariat

A group of financial institutions that recently created the Green Bond Principles today released its governance framework, which will allow for diverse stakeholder input into the Principles, provide effective oversight, and support their further development. The group established the principles to encourage transparency, disclosure, and integrity in the Green Bond market.

The governance framework sets out the membership eligibility, which requires organizations to have issued, underwritten, or invested in Green Bonds, and admits others in the field of green finance as observers. It establishes an executive committee, which will include underwriters, issuers, and investors with global geographic representation. It also provides the appointment of a Secretariat. The governance framework is available for viewing at www.icmagroup.org/greenbonds/.

The International Capital Market Association (ICMA) will serve as Secretariat, assuming administrative duties, and providing guidance for the governance of the Green Bond Principles and other issues. The Secretariat’s duties include facilitating information exchange with issuers, investors, underwriters, and other stakeholders, as well as gathering input for the annual update of the Green Bond Principles.

The Green Bond Principles were developed with guidance from issuers, investors, and environmental groups, and serve as voluntary guidelines on recommended process for the development and issuance of Green Bonds. The Principles suggest process for designating, disclosing, managing, and reporting on the proceeds of a Green Bond. They are designed to provide issuers with guidance on the key components involved in launching a Green Bond, to aid investors by ensuring the availability of information necessary to evaluate the environmental impact of their Green Bond investments, and to assist underwriters by moving the market toward standard disclosures that facilitate transactions.

To date, 25 banks have announced their support of the Principles. In addition to the four founding banks that served as a drafting committee for the Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole CIB, and JPMorgan Chase & Co. – and the nine initial supporters, including BNP Paribas, Daiwa Capital Markets America Inc., Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank, and SEB – the following 12 banks have also expressed their support of the Principles: Barclays, BMO Financial Group, Credit Suisse AG, DNB, DZ BANK AG, ING, Lloyds Bank, Mitsubishi UFJ Securities, Nomura, RBC Capital Markets, Santander Global Banking & Markets, and Société Générale.

For information on how to participate in the Green Bond Principles, please contact ICMA at greenbonds@icmagroup.org. As the Principles are designed to be industry wide, Green Bond issuers and investors as well as banks are invited to participate. Those interested in volunteering for the Executive Committee may submit applications to ICMA between May 1st and May 31st.

Click here for more information on the Green Bond Principles.

International Capital Market Association (ICMA)

ICMA represents all the institutions that are active in the international capital market and has members located in 53 countries. ICMA’s market conventions and standards have been the pillars of the international debt market for almost 50 years, providing the framework of rules governing market practice which facilitate the orderly functioning of the market. ICMA actively promotes the efficiency and cost effectiveness of the capital markets by bringing together market participants including regulatory authorities and governments. www.icmagroup.org