Green bond principles laid out to deploy capital for green projects

By Susanna Moon

Chicago, Jan. 13 - Green bond principles were laid out by a consortium of investment banks that included Bank of America Merrill Lynch, Citi, Credit Agricole Corporate and Investment Banking, JPMorgan Chase, BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB.

The green bond principles are voluntary guidelines on recommended process for the development and issuance of green bonds, which encourage transparency, disclosure and integrity in the development of the green bond market, according to a press release.

The principles suggest process for designating, disclosing, managing and reporting on the proceeds of a green bond.

The principles were developed with guidance from issuers, investors and environmental groups, the release noted.

The four banks that served as a drafting committee for these principles - Bank of America Merrill Lynch, Citi, Credit Agricole Corporate and Investment Banking and JPMorgan Chase - will propose in 2014 a governance process that will allow for diverse stakeholder input into the green bond principles, the release noted.

An independent third party is expected to be designated to serve as a secretariat with administrative duties that include facilitating information exchange with issuers, investors, underwriters, and other stakeholders such as non-profit environmental organizations, non-government organizations, academics and other thought leaders.

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