BIS sees no proof green bonds improved firms’ carbon footprints
Published 14 Sep,2020 via Bloomberg Markets - Companies that issue green debt aren’t necessarily reducing their carbon emissions, underscoring the need for firms to have an environmental rating, according to a report from the Bank for International Settlements.
The median change in carbon intensity -- the ratio of carbon emissions to revenue -- of green bond issuers has been minimal over time, according to the global forum for central banks. That’s because green bonds are issued to finance specific projects without impacting a firm’s environmental credentials as a whole.
“Overall, there is no strong evidence that green bond issuance is associated with any reduction in carbon intensities over time at the firm level,” authors including senior economist Torsten Ehlers wrote in a report released on Monday. “Because green labels apply to standalone projects rather than to the firm’s overall activities, projects promising carbon reductions could be offset by carbon increases of the same firm elsewhere.”
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Jill Ward