Innovative platform for the green bond market

The Green Bond Transparency Platform transforms the green bond market by promoting transparency and data comparability.

Latin America and the Caribbean (LAC) is one of the most vulnerable regions to the effects of climate change. According to the Inter-American Development Bank (IDB) estimations, LAC annual damages due to climate change might reach $100 billion annually to address climate change physical risks such as hurricanes, floods, wild fires and droughts, and needs over additional $150 billion annual investments for mitigation actions. The Latin America and the Caribbean is currently challenged by 39 million jobs lost and over 44 million people who have fallen into poverty. An IDB-ILO study estimates that decarbonization could create 15 million net new jobs in LAC by 2030, in areas such as plant-based food production, renewable energy, construction and manufacturing.

Green bonds are a relevant financial instrument

Green bonds are a relevant financial instrument to attract private investors to the region to support LAC´s efforts to transition to a low-carbon economy and to achieve ambitious Paris agreements targets.

The region has a tremendous potential to promote sustainable investments, with the largest biodiversity pool of the world. Since inception of the market in 2014, the LAC green bond market increased to $24 billion, and still the region accounts only 2% of the global green market with large upward potential.

GBTP harmonizes the reporting

The Green Bond Transparency Platform (GBTP), developed by the Inter-American Development Bank and IDB Invest, supports the harmonization and standardization of green bond reporting to promote green investments by facilitating green bonds issuance. Its goal is to contribute to transparency and comparability, providing greater level of confidence to investors and thereby attract new investments to Latin America and the Caribbean.  

Since 2016, the IDB Group has significantly helped the region’s green capital market by supporting through technical and financial assistance more than 30% of the issuances by volume. To scale-up investment in the region, investors are demanding more transparency and the GBTP provides a solution for all market actors. The GBTP is free of charge, provides technical assistance to green bond issuers and external reviewers to upload their data, and aims to provide a benchmark for best practice disclosure and support to all market actors.

• For issuers, the GBTP facilitates to report in a standardized way and simple format on the use of proceeds and impacts of their bonds.
• For external reviewers, the GBTP provides a way to present their work with issuers on pre- and post-issuance and the conclusions of these reviews.
• For investors, the GBTP facilitates information on the environmental performance and the use of proceeds of specific bonds.
• For public sector authorities, the GBTP is an evidence-based data tool to inform discussions on taxonomies.

Providing all interested parties in LAC with quality data on green bonds in the region will support the growth of the green bond market going forward. The Green Bond Transparency Platform was launched on April 27 in an event with a keynote by the President of the IDB, Mauricio Claver-Carone, and a panel of IDB experts and the CEO Sean Kidney from the Climate Bonds Initiative with an audience of more than 700 full-time participants and broad media coverage including the Financial Times and regional coverage. The GBTP and the technical and financial assistance the IDB provides to green bond issuers supports the pillar on Promotions of Actions against Climate Change of IDB’s Vision 2025. Reinvest in the Americas.

IKI was essential for the jumpstart

Providing all interested parties in LAC with quality data on green bonds in the region will support the growth of the green bond market going forward. The Green Bond Transparency Platform was launched on April 27 2021 in an event with a keynote by the President of the IDB, Mauricio Claver-Carone, and a panel of IDB experts and the CEO Sean Kidney from the Climate Bonds Initiative with an audience of more than 700 full-time participants and broad media coverage including the Financial Times and regional coverage. The GBTP and the technical and financial assistance the IDB provides to green bond issuers supports the pillar on Promotions of Actions against Climate Change of IDB’s Vision 2025. Reinvest in the Americas. 

The support provided by the project ‘LAC Green Finance Facility’ funded by International Climate Initiative was essential to jumpstart the GBTP, and to establish a dedicated Qualified User Support team which provides free-of-charge technical assistance to issuers and external reviewers in the use of the GBTP.  The GBTP aims to reach a complete coverage of the LAC market during 2021 and become a global benchmark for transparency and comparison for the green bond market informing initiatives in other regions including Europe.

The GBTP uses Blockchain distributed-ledger technology to facilitate traceable secure data reporting, was built and tested with a cooperative approach receiving the support of more than 30 key international and regional market players, among which issuers, external reviewers, certifiers, investors, stock exchanges, and leading underwriting banks.  

The GBTP features Excel-based uploads which simplifies issuers’ and external reviewer’ user experiences. The GBTP Qualified User team developed an engagement approach and issuers responded positively at the prospect to simplify their reporting process and reach a wider audience. The team expects to cover the entire market by the end of the year.

In next months, the GBTP will be presented in several international events. The IDB team implementing the GBTP is part of the G20 sustainable finance technical working group to exchange knowledge and share it’s Green Bond and GBTP experience in the ensure replicability and scalability beyond Latin America and the Caribbean.

The GBTP aims to become a powerful source of trustworthy data, enable peer-learning, and facilitate investment decisions to finance a greener economy and helping the Latin American and the Caribbean region to achieve the goals of the Paris Agreement.