Barclays updates green bonds to capture 'compelling' economic opportunity

Barclays has signified its shift towards a low-carbon economy, by announcing a set of green finance products that will help promote sustainability in the UK and across the globe.

The bank worked with ESG research providers Sustainalytics to create the framework

The bank worked with ESG research providers Sustainalytics to create the framework

The banking firm has launched a range of tailored products, all aimed at evolving how Barclays acts in the green finance market. Barclays launched a range of Green Loans, targeting UK clients who require more than £3m in funding. Other loans and asset finance solutions are available for global projects and SME clients.

Barclays’ chair of the Green Banking Council Rhian-Mari Thomas said: “Barclays, like so many of our clients, recognises that addressing environmental challenges is not only a necessity but a compelling economic opportunity.

“We already have an established presence in the green bond market as a successful lead arranger, investor and now issuer so we are delighted to be able to build on our expertise by launching new, innovative green products to help meet the booming demand for green finance from a broader cross-section of our clients. We’re excited to be at the forefront of something so game-changing.”

Other finance products launched by Barclays as part of the update include Green Asset Finances for “green initiatives” and a green deposit system that allows Barclays’ largest clients to outline deposited funds against the bank’s green bonds.

The bank worked with ESG research providers Sustainalytics to create the framework. Insight established during the partnership will be used to identify projects that would generate a positive environmental impact.

The Bloomberg Barclays MSCI Global Green Bond Index is considered an independently evaluated measure of the global green bond market. The latest product launch is set to increase Barclay’s role in financing the low-carbon transition. In 2016, the bank raised £21.1bn in finance for environmental and societal schemes.

TCFD growth

In related news, Task Force on Climate-related Financial Disclosures (TCFD) – which aims to increase investor awareness on climate-related risks – announced that the number of companies supporting its recommendations has doubled in the first five months since they were published.

The TCFD recommends that climate-related data, risks and opportunities are published alongside traditional financial filings, and that companies should map potential risks against certain scenarios.

In June 2017, more than 100 businesses including Unilever, Barclays and HSBC, publicly committed to the recommendations. As part of the One Planet summit in France this week, the TCFD announced that 237 companies, with a combined market capitalisation of more than $6.3trn, have publicly committed to support the recommendations. This included more than 150 financial firms, responsible for more than $81.7trn in assets,

FSB Chair Mark Carney said: "Markets need the right information to seize the opportunities and mitigate the risks that are being created by the transition to a low carbon economy. I am delighted that 237 global companies, from consumer goods giants through to oil and gas majors, with a market capitalization of over $6.3 trillion have supported the TCFD recommendations for voluntary climate-related financial disclosures. 

“This includes 20 of 30 globally-systemically important banks, eight out of ten of the largest asset managers and many leading insurance companies and pension funds, together responsible for assets of over $81.7trn. This solution, of the market and for the market, is truly entering the mainstream.”

The task force is also launching a web-based platform to help companies implement the recommendations. A knowledge hub will equip businesses with tools, resources and references. The hub will go live in the first quarter of 2018.

The announcements form a crescendo of green finance announcements last week. The European Commission announced funding of £8bn for action on climate change. As part of the One Planet Summit, The World Bank, AXA and ING all made big commitments to move financing opportunities away from oil and gas firms.

Last month, the UK and Canada launched the Powering Past Coal Alliance, which commits members to power operations and grids without the use of fossil fuels. last week, the Alliance announced that it had doubled in size, after Sweden and California joined 24 corporates in pledging to the initiative.

Matt Mace


Tags

bank | insurance | low carbon

Topics

Energy efficiency & low-carbon
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