Bonds & Climate Change: Green Finance State of the Market – 2018

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February 2019
Source: 
Smart Prosperity Institute (SPI)

Green Finance State of the Market – 2018 marks the seventh annual stocktake of green bonds and sustainable finance in Canada, produced in partnership with the Climate Bonds Initiative.

State of the Market Canada results from a longstanding partnership between the two organisations and is a country based supplement to the flagship Bonds and Climate Change: State of the Market global report produced by Climate Bonds.

The Canadian report marks domestic highlights from the past year, emerging trends, and identifies specific opportunities for green bond market development.

2018 Highlights: 

  • 2018 annual Canadian green bond issuance reached C$5.5 billion, just shy of 2017’s all-time high of C$5.6 billion.
  • Canada placed 10th globally in 2018 issuance and 9th globally in cumulative issuance with more than C$15.2 billion.
  • Canada’s largest ever green bond was issued by Canada Pension Plan Investment Board (CPPIB) (C$1.5 billion). It is the first ever green bond from a pension fund globally.
  • Sub-national governments continued to drive issuance, with the Province of Ontario as Canada’s largest issuer.
  • Renewables and transportation dominated the use of proceeds, with cumulative allocations of 32% and 30% respectively.

Key Recommendations:

  • Ambitious climate commitments and policy have been put in place to transition to a low-carbon economy. A growing Canadian green bonds market can be instrumental in steering private sector and international capital flows to finance this transition.
  • The creation of a Canadian sovereign green bond and implementing recommendations from the Expert Panel on Sustainable Finance would send strong market signals and contribute to advancing the country’s climate change agenda.
  • Canadian banks, pension funds, and institutional investors must play a more active role in developing green financial instruments and the domestic green bond market to meet investor demand and enhance environmental outcomes.
Countries: 
Canada
Sectors: 
Finance