After S&P Global Ratings released a proposal for assessing green bonds in September 2016, Michael Wilkins, Head of Environmental and Climate Risk Research, tells Environmental Finance that the new and improved Green Bond Evaluation will be released in the first quarter of 2017.
The evaluation tool is now the product of an extensive consultation period, in which S&P received helpful and positive feedback from over 70 market participants and over 140 bilateral meetings. The evaluation tool will measure green bonds in three key areas: transparency, governance, and the use of proceeds, which is either adaptation- or mitigation-based.
One key change as a result of the new feedback is the separation of mitigation and adaptation evaluation processes. Mitigation scores will be based on a project’s contribution towards achieving a sub-2°C global warming scenario, relative to its sector. Adaption evaluation is the estimated environmental cost reduction achieved by green bond adaptation-focused projects. In addition, the Green Bond Evaluation has been developed to include diversifying green bond project types, including water, waste, real estate, and adaptation-focused projects.
The full article can be read here (a subscription is required).