Friday 13 November 2020

Climate Bonds Initiative sets out green bond criteria for shipping sector

The Climate Bonds Initiative has launched a new criteria for green bonds to help steer investments in the shipping industry.

The Shipping Criteria of the International Climate Bonds Standard (CBS) provides a clear definition for evaluation on whether a shipping project contributes to climate change mitigation and guidance on how companies can transition the performance of their assets and their business lines towards zero carbon.

The criteria requires that ships are not primarily dedicated to transporting fossil fuels and are either zero emission ships at the point of application for certification or performing below the average operational emissions intensity of their respective size and class throughout the tenor of the bond.

In the latter case, such ships must also provide a Managed Reduction Plan, outlining how the ship will continue the transition towards zero emissions.

The criteria – developed via a Technical Working Group process with University College London as Lead Technical Consultants - marks a major turning point in best practice for low carbon and climate resilient investments in the shipping sector.

Sean Kidney, CEO, Climate Bonds Initiative said: "The shipping sector has an opportunity to rapidly transition towards zero-carbon emissions. The introduction of the Shipping Criteria to the Climate Bonds Standard opens up another science-based investment pathway for capex to be applied in this sector and deliver a range of positive environmental impacts."

Andrew Stephens, Sustainable Shipping Initiative, Executive Director added: “The journey to sustainable shipping requires collaboration by like-minded peers across the shipping value chain.

“The Climate Bonds Standard’s newly launched Shipping Criteria will provide clear guidance to financial stakeholders, enabling them to leverage their influence in the industry and drive the transition to climate-aligned shipping investments.”