Becoming an issuer of Green Bonds

Becoming an issuer of Green Bonds is a strategic decision and involves a long-term commitment of the issuing entity. Taking the right steps early on during the process is key to achieving a successful Green Bond platform.

The popularity of Green Bonds as an instrument to raise funding for projects with environmental benefits is growing constantly. In 2017 global issuance of Green Bonds surpassed the mark of USD 150bn. Remarkably, investor appetite seems to outpace market growth with most new Green Bond issues being over-subscribed despite growing issuance volumes.

Using Green Bonds instead of normal bonds to fund environmental projects has some distinct advantages such as increased investor diversification and a chance to achieve lower funding cost. In addition the issuer can raise awareness for environmental challenges and how they can be addressed through projects funded by Green Bonds. These projects should, preferably, be in line with the general business activities of the issuer to ensure the credibility of the programme.

The benefits mentioned above have to be weighed against the additional effort that is required to establish a programme to issue Green Bonds. The following overview illustrates main steps required to establish a Green Bond platform. Creating a platform for Social or Sustainability Bonds requires similar steps. Danske Bank can offer expert advice and guide through the journey of becoming an issuer of Green, Social or Sustainability Bonds.