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How do issuers define what is ‘green’ with credibility?

Issuers define categories for environmental projects they plan to support with green bonds and report back to investors depending on their business model and context.

Drawing from the practice of earlier issuers and the GBP, green bond issuers have developed their own green bond definition and process to suit their business profiles.

Investors in green bonds expect information from issuers in sufficient detail to allow them to assess green bond offers, such as how issuers track and use green bond proceeds and how they report the positive impacts expected from green projects. The Investor Network on Climate Risk (a North American nonprofit organization convened by Ceres that advocates for leadership in sustainability) has articulated its “expectations” in a statement to guide issuers and other market participants. (Ceres, “A Statement of Investor Expectations for the Green Bond Market,” Investor Network on Climate Risk, n.d.)

The market has been relying on issuer disclosures, second opinions, and commentary from academics; investment advisers; auditors; technical experts; media; and nongovernmental organizations (NGOs) such as CICERO, the Climate Bonds Initiative, Det Norske Veritas, (DNV), Norway, Oekom, Sustainalytics, and Vigeo, among others. Also, several green bond indices (for example, Barclays/Morgan Stanley Capital International [MSCI], Standard & Poor's, and Solactive) are useful benchmarks for green bond portfolios and support transparency in definitions and processes. Moody’s also provides a Green Bonds Assessment (GBA).

What are Some Examples of Green Bonds by Type of Issuer?

A variety of issuers have taken the early examples of MDBs and the GBP and developed processes that work for their business models and practices. Many have worked with investors to fine-tune the categories of eligible projects and disclosure and reporting aspects. Examples include the following:

Cities, States, and State-owned entities (Subnationals)

British Columbia supported energy efficiency in new hospitals meeting Leadership in Energy & Environmental Design (LEED) gold certification through a 32-year, Can$231 million green bond issued in July 2014. (Government of British Columbia, “North Island Hospitals Project Green Bond Issue a First,” press release, July 2, 2014).

City of Gothenburg, together with Swedish bank Skandinaviska Enskilda Banken (SEB), developed a six-year, Skr 500 million green bond to finance various environmental projects in public transport, water management, energy, and waste management. (SEB Skandinaviska Enskilda Banken, “SEB: Gothenburg City First in Nordics to Issue 'Green' Bonds,” press release, September 27, 2013).

City of Johannesburg issued a 10-year, R 1.46 billion green bond in June 2014 to finance green initiatives such as the Biogas to Energy Project, the Solar Geyser Initiative, and other projects that will move the city closer to a low-carbon infrastructure and increase preservation of natural resources. (City of Johannesburg, “Joburg Pioneers Green Bond,” press release, Joburg website, June 9, 2014).

State of Massachusetts issued two green bonds—a 20-year, US$100 million green bond in June 2013 and a series of green bonds with maturities ranging from 5 to 17 years in September, 2014—to finance environmentally beneficial projects in clean water, energy efficiency, and land remediation, among other areas. (Commonwealth of Massachusetts, “Mass Green Bonds: Investing in a Greener, Greater Commonwealth,” First Quarterly Investor Impact Report, Quarter ended August 2013).

Bi–lateral trade and development agencies

Export Development Canada issued a three-year, US$300 million green bond in January 2014 to support direct loans in sectors that preserve, protect, or remediate air, water, or soil or help mitigate climate change. ("Export Development Canada Green Bond Program," accessed July 31, 2015, Export Development Canada (EDC)).

KfW Development Bank has issued green bonds since July 2014, including a five-year, €1.5 billion bond to finance KfW’s environment investment program including generation of renewable power, especially from wind and photovoltaics. ("Green Bonds – Made by KfW," KfW Group, accessed June 2015).


The District of Columbia, Water and Sewer Authority (DC Water) issued US$350 million in green bonds in July 2014 with a 100-year final maturity to finance a portion of its Clean Rivers Project. (District of Columbia Water and Sewer Authority, “DC Water Announces Successful Sale of $350 Million Green Century Bonds,” press release, July 10, 2014).

GDF Suez, the French utility, issued the largest-ever green bond—a €2.5 billion (about US$3.4 billion) bond in May 2014—to fund renewable energy projects. (GDF SUEZ, “GDF Suez successfully issues the largest Green Bond to date,” press release, May 13, 2014).


Regency Centers Corporation, a real estate investment trust, issued US$250 million in green bonds in May 2014 to finance the construction of shopping malls that meet the standards of the U.S. Green Building Council. (Regency Centers Corp., “Regency Centers Sells $250 Million 'Green Bonds' Due 2024," press release, May 16, 2014).

Toyota Financial Services issued a US$1.75 billion green bond in March 2014 to fund consumer loans and leases for its electric, hybrid, and low-emission vehicles. The bond returns are linked to the performance of these consumer loans and leases. (TFS Toyota Financial Services, “Toyota Financial Services (TFS) Issues Auto Industry’s First-Ever Asset-Backed Green Bond," press release, March 24, 2014).


Bank of America issued two green bonds—US$500 million in November 2013 and US$600 million in May 2015—to finance renewable energy projects such as wind, solar, and geothermal energy as well as energy efficiency projects. (Bank of America, “Bank of America Issues Second Green Bond,” press release, May 14, 201)5.

ABN AMRO of the Netherlands issued a five-year, €500 million green bond in June 2015 to support mortgages in energy-efficient homes, loans for home solar panels, and sustainable commercial property. (ABN AMRO, "ABN AMRO ‘Green Bond’ Opens Up Sustainable Housing and Property Market to Investors," press release, June 2, 2015).

YES BANK, India’s fourth-largest private sector bank, issued Rs 10 billion in 10-year green infrastructure bonds in February 2015 to support its renewable energy portfolio. (YES BANK, "YES BANK Successfully Issues India’s FIRST Green Infrastructure Bonds," press release, Feb. 25, 2015).