S&P Expands Green Evaluation Service
S&P Global Ratings has launched its Green Financing Framework Alignment Opinions under its already-established Green Evaluation service. This means that, for the first time, the credit ratings agency can provide second party opinions on not just the “greenness” of labelled and non-labelled green financial instruments, but also the alignment of entities’ frameworks for issuing such transactions to global market guidelines. The original Green Evaluation can complement these opinions by providing investors with an independent, transparent and deep dive impact assessment of the “greenness” of a transaction.
— S&P Global Ratings (@SPGlobalRatings) June 9, 2020
The Framework Alignment Opinion reflects the degree to which an entity’s green financing framework, which governs its existing or proposed green issuance, adheres to the four components of either the Green Bond Principles (GBP) or the Green Loan Principles (GLP): Use of Proceeds; Process for Project Evaluation and Selection; Management of Proceeds; and Reporting. Devised by the International Capital Markets Association (ICMA), the GBPs are the leading voluntary set of principles for the governance and transparency of green bonds. Similarly, the Loan Market Association (LMA)’s GLP provide the same guidelines for green loans.
Susan Gray, Global Head of Sustainable Finance Business and Innovation, S&P Global Ratings added: “In an increasingly complex capital markets environment, issuers are looking for informed and respected opinions on their green financing and ESG strategies that help them communicate clearly with investors. At the same time, the investing community is expecting more transparency and better analysis of the green and ESG attributes of their investments. We believe the market’s appetite for framework alignment opinions demonstrates a greater commitment to sustainable finance. ”
This is the latest development to S&P Global Ratings’ Green Evaluation service, which, since its launch in 2017, has evaluated the net environmental benefit of over U$38 billion worth of transactions. It follows the expansion of the Green Evaluation methodology in December 2019 to include agriculture, forestry, and waste, along with 30 additional technologies, such as cogeneration (biomass-based) and fuel cells as part of the renewables analysis.
The success of Northbound trading showed electronic execution is way forward for the bond market.
IRS trading volumes have fragmented without an equivalence agreement.
Increased electronification has created useable and accessible real-time and historic trade data.
Members are evaluating payment-versus-payment for currencies not yet eligible for CLSSettlement.
With Louise Drummond, Global Head of Investment Execution, Aberdeen Standard Investments