On Aug 1st, Beijing Enterprises Water Group Limited (00371.HK) issued the first corporate green panda bond in China with an issuance of RMB 700 m (USD 105 m). SynTao Green Finance, as a third party verifier, provided assessment and verification to the bond. “The issuance of the corporate green panda bond indicates various potential types of green bond and the expansion trend of the green bond market, which contribute a lot to the establishment of China’s green finance system.”, said Ms. Tracy Cai, the CEO of SynTao Green Finance.
The bond has a fixed interest rate of 3.25% on an 8-year coupon and is rated AAA. The bond is listed on the Shanghai Stock Exchange. Proceeds raised by the bond are earmarked for the demonstrated project on integrated water resources management in Luoyang. SynTao Green Finance assessed the data and information on environmental impacts and benefits of the bond, and confirmed that the green credentials of the bond comply with the China Green Bond Endorsed Project Catalogue published by the Green Finance Committee.
Independent third party verification plays a vital role in green bond issuance. The biggest difference between a green bond and a normal bond is whether it is “green” or not. Third party verification helps to identify and confirm the environmental benefits of the project(s) financed by the proceeds, which helps avoid green bond being abused as a means of greenwashing and mitigates corresponding risks for responsible investors.
Green bond market has witnessed a rapid expansion in China. Shanghai and Shenzhen stock exchanges as well as the National Association of Financial Market Institutional Investors (NAFMII) issued green bond related policies to encourage issuers to obtain third party verification. The International Capital Market Association’s (ICMA) Green Bond Principles and the Climate Bonds Initiative's (CBI) Climate Bond Standards also define the role and significance of third parties.
SynTao Green Finance is an observer organization of the Green Bond Principles launched by ICMA, the first China based Climate Bonds Standard verifier, and a signatory to the UN Principles for Responsible Investment (PRI). We provide pre- and post-issuance green bond verification and green finance capacity building services. As a leading sustainable finance consultancy, SynTao Green Finance also provides comprehensive ESG information analysis, responsible investment capacity building, environmental and social risk management, and green finance product innovation services for investors, companies, governments, academia and civil society.