The need for green infrastructure, including low-carbon and less polluting assets to reduce greenhouse emissions, is growing.
In Australia, infrastructure-related emissions account for over half of the country’s total greenhouse gas emissions while in New Zealand, energy and transport contribute just over 30 per cent of its total greenhouse gas emissions.
“Institutional investors need to back new green offerings and work more actively across the finance sector and with policy makers to turn the plethora of opportunities identified in the GIIO report into long-term national pipeline of investable, low carbon infrastructure projects,” says Sean Kidney, Climate Bonds Initiative’s Chief Executive Officer.
Compare the pair
Australia and New Zealand have contrasting climate policy regimes.
Little progress has been made in Australia since the government signed the Paris Agreement in 2015 while New Zealand has committed to being carbon neutral by 2050 and is looking at mechanisms to phase out fossil fuels.
However despite the challenging policy regime in Australia, domestic major banks, sub-sovereigns and corporate issuers have led the way in the green bond market.
Green bond issuance in Australia has to date reached A$8.3 billion. The country was the second largest green bond market in the Asia Pacific region in the first half of 2018 and 12th globally with A$2.6 billion of issuance, up 5.3 per cent from the corresponding period in 2017.
Proceeds have typically been used to finance renewable projects but increasingly transport projects are attracting green bond funding.
Australian green bond market issuance 2014-2018