National Association of Market Institutional Investors

By Paul Davies and Andrew Westgate

Green bonds, which tie the proceeds of the issuance to investments that have positive environmental and/or climate benefits, are a rapidly growing asset class. Recent figures have corroborated the narrative of growth predicted by industry experts.

In the first quarter of 2016, green bonds totalling US$17 billion were issued globally – three times the total amount issued in the same period in 2015, almost half of which are attributed to Chinese issuers. Banks continue to dominate issuances, but a recent corporate issuance shows the burgeoning development of the asset class.

Zhejiang Geely – perhaps best known in the UK as the owner of the London Taxi Company, manufacturer of London’s iconic black taxi cabs – recently issued US$400 million of green bonds. The funds will be used in part to develop green taxis in Europe, but also to fund electric vehicle design in Asia.