A FairTrade-like certification scheme for bonds – that is how the Climate Bonds Initiative describes itself. The Climate Bonds certificate applies to bonds that are consistent with the 2 degrees Celsius warming limit of the Paris Agreement. As an approved verifier, we will be providing assurance to issuers and investors that bonds contribute to a low-carbon economy.
For the year 2019, credit rating agency Moody’s estimates the volume of newly issued green bonds at up to 200 billion USD. At the moment, this amounts to only a fraction of the total bond market, but the segment is growing rapidly. With sustainable finance becoming increasingly important, the pressure is on investors to take environmental, social and governance criteria (ESG) into account.
The growing relevance of Sustainable Finance is also supported by legislative plans in various countries. Germany, for example, is aiming to take the lead in this area to transform and execute Agenda 2030. At the international level, the EU published its EU-Action Plan: Financing Sustainable Growth in March 2018. Because they mobilize funds for the transition to a low-carbon economy, Green Bonds have a key role to play in these plans. However, to make Sustainable Finance effective, we need reliable standards.
One certification – many advantages
Certification to the Climate Bonds Standard helps issuers attract new investors and demonstrate their commitment to a low-carbon economy. Because the certification involves an independent review by qualified verifiers like DQS, it saves investors from having to do their own environmental due diligence. All bonds are listed on the Climate Bonds website, where issuers can reach a larger international audience. Not least, issuers can improve their reputation and demonstrate their focus on low-carbon projects.
Dr. Sied Sadek, Managing Director at DQS CFS and approved verifier of the Climate Bonds Initiative, is a strong advocate of the initiative: “The Climate Bonds Certification has great value because it enables investors to separate the green from the greenwashing. The transparency involved is good for everyone – issuers, investors and our climate.” The certification is available for any organization seeking to finance or re-finance low-carbon projects, such as project developers, utilities, equipment manufacturers, banks and aggregators. The program is currently available for bonds related to the following assets: Solar Energy, Wind Energy, Geothermal Energy, Marine Renewable Energy, Water Infrastructure, Low Carbon Transport & Low Carbon Building. More sector criteria are in development.
DQS – Your Partner for Certification
DQS is your partner for Climate Bonds certification. We schedule the verification without hassle, rely exclusively on experienced auditors, create added value with intelligent audit reports and guide you through the entire certification process. DQS has been approved to conduct Climate Bonds verification across the globe. Our certificate of approval is available for download here.
Click here to receive further information regarding the Climate Bonds Certification and the Certification Process. Contact us if you have any questions about the new collaboration, or register for our newsletter to receive regular updates on certification and standards.