25 October 2017: Today the JSE celebrates the launch of its Green
Bond Segment which provides a platform for companies and other institutions
to raise funds ring-fenced for low carbon initiatives and investors to invest
SRI funds in securities that are truly green.
Director of Capital Markets at the JSE says that the introduction of our new Green
Bond Segment provides companies with an effective tool to raise capital for
investments into sustainable projects they would have been funded internally.
“Issuing a green bond can help companies to strengthen their credentials as
sustainable and responsible organisations. At the same time green bonds allow
investors to mitigate the effects of climate risk as a part of their investment
portfolio, while these bonds also satisfy environment, social and governance
(ESG) requirements and green investment mandates.”
emerging markets are especially vulnerable to the impact of climate change.
“The JSE views combatting this problem as imperative to building a climate
resistant future for the African continent in securing future jobs and
investments. Globally we are still very far away from realising the level of
investment necessary to prevent global temperatures from rising further. Green
bonds can play an important role in addressing this shortfall.”
market for green bonds is currently valued at around $895 billion dollars and
year-on-year issuance has doubled in size annually over the past two years.
“The JSE believes its well-regulated, liquid and transparent platform can
provide a home for true green securities,” says Nemer.
The JSE has
aligned its JSE Green Bond listing requirements in line with international best
practice but kept it in context of the South African economy to include
specific rules pertaining to green bonds. This includes that institutions which
issue a green bond appoint an independent reviewer to confirm that the bond can
be classified as green according accepted industry standards. The JSE also
requires green bond issuers to disclose the proceeds generated through issuing
the bond as well as how these funds are applied throughout the lifetime of the
bond. This ensures that the capital raised is applied to the green projects it
is earmarked for to give investors comfort the funds are applied in line with
the issuers intentions of raising a green bond.
The City of Cape
Town green bond, which is already listed on the JSE’s bond market, was
certified by the Climate Bonds Initiative, while international ratings
agency Moody’s also awarded it an excellent GB 1 rating. The projects to
be funded by the green bond are a mix of adaptation and mitigation initiatives
and include the procurement of electric buses, energy efficiency in buildings
and water management initiatives like water meter installations and
replacements, water pressure management, and the upgrade of reservoirs. The
City raised R1 billion for these projects when it issued the 10- year bond in
July this year.
Donna Nemer, Director of Capital Markets at the JSE and Patricia de Lille, Executive Mayor of Cape Town.
Nicky Newton-King, CEO of the JSE; Patricia
de Lille, Executive Mayor of Cape Town and Donna
Nemer, Director of Capital Markets at the JSE.
ABOUT THE JSE
The Johannesburg Stock Exchange
is based in South Africa where it has operated as a market place for the
trading of financial products for 130 years. It connects buyers and sellers in
equity, derivative and debt markets. The JSE is one of the top 20 exchanges in
the world in terms of market capitalisation and is a member of the World
Federation of Exchanges (WFE) and holds the chairmanship of the Association of
Futures Markets (AFM). The JSE offers a fully electronic, efficient, secure
market with world class regulation, trading and clearing systems, settlement
assurance and risk management. www.jse.co.za