World Bank (IBRD) Launches Green Bond Impact Report
Washington, DC, July 31, 2015 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) released today a Green Bond Impact Report with detailed information about the environment and social results expected from projects supported by its green bonds through June 30, 2015. These projects target low carbon and climate-resilient growth in IBRD’s member countries.
“The report is another milestone for us in our green bond program and responds to investor requests for concise project impact information,” said Doris Herrera-Pol, Director and Global Head of Capital Markets at the World Bank. “We appreciate the close partnership with investors who gave us feedback as we developed this report and hope it will also be useful to other issuers.”
The World Bank has issued 100 green bonds in 18 currencies raising the equivalent of US$8.4 billion. As of June 30, 2014, proceeds of these bonds have been allocated to 77 green bond eligible projects with commitments totaling US$13.7 billion. These projects have been selected based on defined green bond eligibility criteria and span a range of sectors across the world:
Examples of results for green bond-supported projects include:
- In China, two energy efficiency projects in industry are estimated to reduce 12.6 million tons of CO2 eq. annually - equivalent to taking 2.7 million passenger vehicles off the road each year;
- In India, a project that builds over 1,100 km of dedicated freight railway lines is expected to reduce 430,000 tons of CO2 eq. annually - equivalent to taking 90,000 passenger vehicles off the road each year; and
- In Mexico, a project to improve forest management is expected reduce deforestation and forest degradation in 1.6 million hectares of forest - slightly more than the size of Connecticut - and benefit 4,000 forest communities.
In preparing this first report, the World Bank worked with investors and other issuers to select key indicators that show the positive environmental and social results expected from projects supported by green bonds. The indicators are intended to illustrate the type and scale of expected results in a variety of sectors and country contexts. The report also describes some of the challenges for impact reporting, such as consistent assumptions and calculation methodologies, which are important to appreciate when interpreting and comparing data.
The report draws from publicly available information on the World Bank website (http://www.worldbank.org/projects). In addition to this report (http://treasury.worldbank.org/cmd/pdf/WorldBankGreenBondImpactReport.pdf), investors also have access to summarized information on a project-by-project basis on the green bond website (http://treasury.worldbank.org/cmd/htm/MoreGreenProjects.html).
The World Bank’s role as a pioneer in the green bond market and its efforts to provide information about expected impacts of eligible projects through its comprehensive impact report has been welcomed by investors:
Andrea Weber, Sustainable Investment Analyst, Bank J. Safra Sarasin, said: “The World Bank is a pioneer in the green bond market and with its latest “Green Bond Impact Report” it also leads the way in reporting. Especially noteworthy is the effort to harmonize various indicators in cooperation with other multilaterals. This not only leads to a more consistent reporting of the extra-financial characteristics of the green bond issuances, but also is an important step in enhancing the credibility of the green bond market in general.”
Ashley Schulten, Director, Portfolio Manager, Blackrock, said: “Impact reporting is a key differentiator in validating green investments. As more investors seek to achieve environmental outcomes, we need to be able to answer the question posed: how do these investments benefit the environment? This first-of-its-kind reporting template and guide that IBRD has put forth helps create market standards for disclosure of quantifiable impact measures. Recognizing the challenges in this space, we are confident this template will further the dialogue across the myriad stakeholders and bring greater clarity and transparency for institutional investors.”
Chris Wigley, Senior Portfolio Manager, Responsible for Credit, Mirova, said: “As a responsible investor, one of our objectives at Mirova is to align investments with a plus 2 degrees or lower, global warming scenario. Consistent with this, we appreciate greatly the World Bank’s new impact reporting format, particularly the detail and precision in the areas of annual energy saving, renewable energy capacity added and annual Greenhouse gases avoided. We believe this initiative constitutes another major step forward in addressing climate change.”
Mark Regier, Vice President of Stewardship Investing, Praxis Mutual Funds, said: “The World Bank Green Bond Impact Report establishes yet another benchmark for the rapidly-emerging green bond industry. Their leadership in this space now extends to the tracking, communication and contextualization of the on-the-ground impact of these innovative investment vehicles. Their work on harmonization provides an example to other issuers and will be deeply appreciated by green bond investors around the world. We are deeply grateful for the vision and commitment the World Bank has shown in leading the growth of the green bond sector.”
Lars Lindblom, Portfolio Manager, Fixed Income, Second Swedish National Pension Fund / Andra AP-fonden, said “We think the report is very good and provides a brief and informative overview of the World Bank Green Bond projects. We especially value the specific metrics that were chosen to inform investors about the expected outcomes of the individual projects, which are included in the Impact Report.”
Stephen M. Liberatore, Managing Director and Lead Portfolio Manager - SRI Fixed Income, TIAA-CREF Asset Management, said: “Access to clear, concise and meaningful impact reporting is an essential element in the ability of investors to align their assets with their principles. The opportunity to identify and analyze exactly how their investment dollars are being deployed to address the environmental issues they deem most crucial, is critical. As a leader in the funding of environmentally-beneficial projects through its Green Bond Program, The World Bank’s inaugural Impact Report is impressive and sets a high standard that other issuers should strive to emulate.”
Manuel Lewin, Head of Responsible Investment, Zurich Insurance Group, said: “As an investor, Zurich wants to better understand how investments translate into social and environmental outcomes. With green bonds in particular, it’s the impact that makes all the difference. The impact reporting pioneered by World Bank and others is setting a standard, and may just give ‘value creation’ a whole new meaning.”
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 188 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. The World Bank has been issuing bonds in the international capital markets for over 65 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: (www.worldbank.org/debtsecurities).
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