Mr. Altaf Nanji reports
RBC CAPITAL MARKETS SIGNS ONTO THE GREEN BOND PRINCIPLES, HOSTS GREEN BOND CONFERENCE IN TORONTO
RBC Capital Markets, the corporate and
investment banking arm of Royal Bank of Canada, has joined the second wave of international banks that have signed
the Green Bond Principles. As disclosed today in a release issued by the International Capital Market Association, which will
provide administrative and governance duties over the Green Bond
Principles, 25 banks have announced their support of these principles
to date, which strive to provide voluntary guidelines for the process
and development of green bonds.
This news follows RBC Capital Markets' inaugural Green Bond Conference,
which was held in Toronto on April 2, 2014, and brought together
corporate and institutional investors along with a panel of
international issuers and other experts. The conference was developed
as part of RBC's dedication to developing sustainability initiatives
and to the green bond market both in Canada and globally. The global
green bond market has seen rapid growth since the first issuance of a
green bond in 2007. Between 2007 and 2013, total green bond issuance sits
at $24.2-billion, with 2013 issuance alone comprising $11.8-billion and first-quarter 2014
yielding record issuance of $9-billion.
Speaking at the conference, Paul Belanger, a managing director in debt
capital markets at RBC Capital Markets, said: "Evidence of climate
change continues to dominate global headlines. The green bond market
provides the perfect opportunity for socially responsible investors to
participate in projects that promote environmental sustainability. We
are pleased to have assembled a world-class panel of green bond issuers
and other experts, with institutional investors seeking to learn more
about this growing debt product."
Green bonds have emerged as a popular instrument for supranationals,
development banks and governments to unlock private capital for a
variety of sustainable projects. The Ontario government has announced
its intention to launch its first green bond in 2014 as a strategy to
finance environmentally friendly infrastructure projects throughout the
province. Many panellists at the RBC conference agreed that the
increasing appeal of green bonds lies in the ability to support
sustainability projects while maintaining the risk/reward
characteristics of traditional fixed-income products.
Commenting on the state of the green bond market, Altaf Nanji, head of
Canadian credit research at RBC Capital Markets, said: "Beyond the very
near term, green bond issuance could be adopted by various corporate
sectors, with the instrument being particularly well suited for real
estate (including pension fund), power generation and utility sectors.
For context, Canadian-dollar issuers in these sectors have general-obligation bonds of approximately $100-billion outstanding."
"Endorsing the Green Bond Principles is RBC's latest commitment to
embedding sustainability into our core business activities," said Sandra
Odendahl, director of corporate sustainability at RBC. "We have been
incorporating environmental considerations into financing since we
added environmental credit risk management to our lending policies in
1991. Since then, we've broadened and deepened our environmental
programs and have been recognized as a corporate leader in
environmental sustainability. As the market for green bonds grows, RBC
will continue to explore how financial products can be used to drive
positive social and environmental impact."
It is clear that capital will be required in order to complete
sustainability initiatives around the world. RBC looks forward to being
an active participant as more socially responsible investors partake in
the growing green bond market.
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