SEB, one of the top Nordic corporate banks, forecasts that green bonds will account for 10–15 percent of the corporate bond markets by 2020. “Raising money earmarked for green business development can be a significant step on the way to a new, more sustainable way of thinking and doing business,” says Pasi Rinne, Chairman of the Board at Gaia.
The recent green bond issues by Toyota and Unilever aim to finance new green business such as renewable energy and electric cars. Toyota’s bond was oversubscribed and raised the company 1.75 billion USD. Unilever just issued about 400 million euros of bonds, aiming to reduce the environmental impact from its operations and taking green bonds to new areas.
Previously, green bonds were mostly issued by international finance institutions such as the World Bank, and they were small. Green bond investors mostly included public-sector institutional investors.
This is changing. Now more than half of green bond owners are asset managers. However, green does not automatically mean profitable. But cutting emissions, energy and waste costs, substituting chemicals with bio-based products as well as achieving greater material efficiency can be keys to better business.
In the past, investors found it difficult to know what is green and what is not. Now experience and excellence bolster investments in cleantech and green solutions. Services like the Gaia Biorefiner are in high demand because they help to measure the sustainability of solutions and to compare them.
“Cleantech has classically been driven by consumer demand, regulatory changes and the need to find alternatives to costly and scarce raw materials. Recently, the careful preparation of investment decisions and scrutiny of business risk assessments by finance institutions have started to favour cleantech solutions. The increase in green corporate bonds can give a new boost to cleantech,” says Pasi Rinne.
More information:
- Pasi Rinne, Chairman of the Board, Gaia Consulting Oy, tel. +358 400 464 127, email: firstname.lastname@gaia.fi
