Overview
Environmental Finance Data tracks every self-labelled green, social, sustainability, transition and sustainability-linked bonds issued since the inception of the market in 2007. Since 2020 it has also been tracking the publicly available green and sustainability-linked loans.
The sustainable bonds covered include:
Corporate self-labelled bonds
Green Asset Backed Securities; asset-backed securities whose cash flows come from a portfolio of underlying receivables such as loans, leases and PPAs. The receivables are associated with green (e.g., renewable energy, energy efficiency) projects.
Green Mortgage Backed Securities
Green Project Bonds; bonds backed by the cash flows of an underlying renewable energy project or portfolio of projects
Green, Social and Sustainability Sovereign and Supranational Bonds; bonds issued by multilateral banks, development finance institutions and export credit agencies to finance green projects. This includes bonds issued by national development banks
State and Municipal Bonds; bonds issued by state, municipal and provincial (i.e., sub sovereign public sector) entities to finance green projects
Green Guarantees; bonds issued by OPIC included
Environmental Finance Data do not opine on the validity/greenness/alignment of self-labelled sustainable bonds and loans. Any self-labelled bond or loan is added to the database with the intention of creating the most comprehensive database possible. News articles outlining controversies are added to bond, loan, issuer, and borrower pages and professional users can make their own judgements of the transaction or issuer based on their knowledge and supporting articles and documents on the database.
The majority of these bonds are aligned with one of:
The Green Bond Principles
The Social Bond Principles
The Sustainability Bond Guidelines
The Sustainability-linked Bond Principles
Climate Bonds Certification, issued by the Climate Bonds Standard Board
Green Financial Bond Directive, issued by the People's Bank of China
Green Bond-Endorsed Project Catalogue, issued by the People's Bank of China
Private placements – we include private placements where these have been declared to us and we have sufficient information to include in the database.
Research Method
Environmental Finance has a reputation in delivering market-leading content on the green bond market. Since the launch of this market in 2007 Environmental Finance has built a respect in the market for honest and unbiased reporting based on the facts. Accuracy is important to us and with many issuers and investors sharing information with us this enables us to provide you with premium content.
All data is manually collected, inputted, and vetted. Documentation and official statements are gathered by contacting issuers or lead managers involved in the issuance, through emails or phone calls. In addition, our analysts conduct web research of the issuers web sites to extract relevant information. The bulk of our data is drawn from research. All data is quantitative and does not reflect any personal belief or opinion.
Environmental Finance makes every effort to ensure the accuracy of the content however if you spot inaccuracies we apologise and ask to be kept informed. In addition, if you can provide further documentation of interest on any of the deals, we are keen to hear from you. Please contact us at info@efdata.org
Loans
Green and sustainability-linked loans were added to the database in 2020. The private and bi-lateral nature of the loan market creates challenges to coverage and transparency. It is difficult to accurately gauge the database coverage of sustainable loans. We endeavour to track the publicly reported sustainable loan deals in as much detail as possible.
We are continually working on improving coverage and enriching the data available on sustainable loans however the data disclosure is less standardised than the sustainable bond market and our listings are therefore less detailed.
The Loan Markets Association (LMA) provide Green Loan Principles and Sustainability-linked Loan Principles and where stated we record the alignment of any loan to these voluntary guidelines.
Technical information
All rankings are done is USD$. The conversion from other currencies is completed using the FX exchange rate taken daily from Oanda (https://www.oanda.com/currency/converter/) at bond or loan settlement date.
Lead manager allocation – unless specifically stated otherwise all bonds and loans amounts are equally allocated to each lead manager and lender on the deal (deal amount/number of lead managers or lenders).
Search criteria and filters definitions
Bond label
The self-label of each bond (green, social, sustainability, transition and sustainability linked).
Bond sub label
Labels in addition to the above bond labels which further classify the bond. Sub labels can be externally recognised or internal classifications from issuers.
Bond standards
The main industry standards which the majority (over 97%) of bonds are aligned to. Issuers can cite alignment to the standards and commonly are verified by standard providers.
Use of proceeds
Green, social and sustainability bonds can be searched by stated use of proceeds. The structure of green, social and sustainability bonds require specific use of proceeds to be stated at point of issuance. The bonds can be searched and filtered by use of proceeds laid out by the ICMA principles for each label.
All use of proceeds information is pre issuance rather than post issuance (stated in allocation, use of proceeds or impact reports).
KPI categories
KPI categories for sustainability-linked bonds and loans are an in-house categorisation created by Environmental Finance Data. KPIs can be very issuer specific, and the categorisations are designed to show broad alignment to a type of KPI. Where publicly available, the details of each specific KPI are recorded in the bond or loan page notes.
The categories were devised through the analysis of available KPI information and are regularly under review. There are processes in place for granularity or KPI categories to be added as necessary.
KPI details
KPI details for sustainability-linked bonds and loans covers the available additional information on KPIs. We currently track the "step up" and/or "step down" which is the % a coupon rate will change if KPI(s) are missed. The "date" tagged is the observation date for the KPI, not the penalty date. A "KPI verifier" is tagged if an external entity is specifically mentioned as the verifier of a specific KPI. The "frequency" is the number of times a KPI is checked and step up/step down of coupon rate occurs. For all KPI details an asterisk* denotes that there is an untypical element to the datapoint which is explained in the notes section. We define "typical" KPI step up or downs as one off and if multiple KPIs and targets exist the step up/down are cumulative.
Issuer type
All issuers are tagged as one of six types of issuer: corporate, financial institutions, sovereign, government agency, and supranational. Financial institutions include all forms of banks and asset managers, agency is all government agency affiliated companies, sovereign issuers are governments.
Country/region
Country and region data relates to the head office of the issuers, not the country of the potential funded projects.
United Nations Sustainable Development Goals (UN SDGs)
Alignment to the SDGs is self-reported by issuers or borrowers, commonly in pre issuance press releases and post issuance impact or allocation reports. Environmental Finance do not take a view on the validity or rigour of reported SDG alignment.
Bond asset class
Common classes of sustainable bonds e.g. asset back securities, mortgage back securities, Sukuks.
Loan instrument type
Also known as as loan product or loan type, refers to the specific terms, features or conditions of the loan e.g. revolving credit facility, derivative, accordion facility.
Sectors
The 36 sectors are defined by Environmental Finance Data criteria. The sectors are based on industry norms and standards across different data providers and analysis of sustainable issuers and borrowers. The issuer/borrower sector is defined by the issuer/borrower activities, not the sector of the specific bond or loan.
The sector classification is regularly assessed and updated. Currently if an issuer is active in multiple sectors, they have multiple sector tags. This can lead to double counting of bonds and loans, with the transaction appearing in multiple sector searches. It can also create anomalous results in some cases with large conglomerates appearing in sector searches despite the specific bond or loan not being relevant to the search sector.
Lead managers and lenders
Lead manager rankings
The lead manager tab on the platform can be ranked by number of bonds and $ value of bonds and can be filtered by a variety of data points, for example country, region, sector, currency, label, and issuer type. The $ value of a bond is divided pro rata (equally) to all lead managers listed on the instrument as data on specific involvements are not readily available.
Lender rankings
The lender tab on the platform can be ranked by number of loans and $ value of loans and can be filtered by a variety of data ponts, for example country, region, sector, currency, label, and issuer type. The $ value of a bond is divided pro rata (equally) to all lenders listed on the instrument as data on specific involvements are not readily available.
Lender roles
Lender roles refers to the sustainability coordinator(s), Mandated Lead Arranger(s) (MLA) and bookrunner(s) for sustainable loans. This data is derived from press releases and directly from lenders and data coverage in December 2023 was 42%. Lender role rankings are produced using the number of loans (total) and the $ value (pro rata) of the transactions the lenders are tagged to. If more than one lender fulfilled a role on the transaction, the value of the loan is divided equally between the lenders.
Resource type definitions
Final terms
A legal document required for any bond or tranche issuance used in conjunction with the bond Prospectus outlines the final terms of the bond or tranche pricing. Final terms are required for the listing of the bond on a stock exchange and includes use of proceeds disclosure.
Framework
A bond framework outlines the proposed use of proceeds for any bond issued using the framework. Frameworks commonly include any alignment to principles (e.g. ICMA's Green Bond Principles) and usually has a second party opinion from an external reviewer.
The vast majority of issuers have a framework. Some issuers create a single "sustainable framework" while others have separate a "green bond framework" or "social bond framework" or "sustainability-linked framework". Some companies use a sustainable framework for green or sustainability-linked loans in addition to bonds.
Frameworks are well established and generally follow similar structures and formats.
The same framework can be used to issue multiple bonds. There is no issuance limitation or expiry date on a framework however frequent bond issuers do tend to update their frameworks regularly every few years as their projects and proposed use of proceeds evolve.
Second party opinion (SPO)
An independent review from an external company of sustainable/green/social bond frameworks which assess the selection criteria for the projects financed by sustainable bonds and the framework's alignment to recognised international principles (e.g. ICMA's Green Bond Principles or the LMA's Green Loan Principles).
Second party opinions generally provide a sustainability rating for the framework and planned allocation of assets.
Most sustainable frameworks have a second party opinion as it is required by most international principles and expected by most investors.
Handbooks/Guides/Papers
Commonly cited handbooks, guides, or papers. Including ICMA principles and handbooks and taxonomy information. Periodically updated with new handbooks/guides/papers.
Sustainability report
A report, commonly annual, which covers a wide range of sustainability activities and impacts of a company. There are no set standards or formats for these reports and the exact title varies from company to company. Broadly, they have replaced Corporate Social Responsibility (CSR) reports for many companies. CSR reports, sustainable development reports and other similar reports are all tagged as Sustainability Reports in the resource library.
Environmental Finance Data differentiate between sustainability reports and impact reports if the report contains bond or loan specific impacts, attributed specifically to the bond or loan issued, it is tagged as an impact report. Any reports which contain more general, companywide sustainable impacts are tagged as Sustainability Reports. We will be monitoring the publishing and reporting of KPI achievement for sustainability-linked products and tag the reports accordingly.
Sustainability website
There are some issuers and borrowers who do not publish their sustainability information or impact reports in pdf format and instead publish information on the sustainability section of their websites. Website links are regularly audited to prevent dead links but on occasion organisations change their sustainability page addresses and the database links become defunct.
Impact report
An impact report contains bond or loan specific impacts, directly attributed to the issuance or borrowing. Impact reports generally include quantitative metrics of the environmental or social impacts of bond proceeds and can also include anecdotal qualitative information such as project case studies.
There is little standardisation of impact report format, frequency, metrics, and detail. Most impact reports are title "Impact Reports" but there are some semantic nuances in the report titles. The reports will be tagged as impact reports if they contain bond or loan specific impact metrics.
Use of proceeds report
Use of proceeds or allocation reports can be synonymous with impact reports. Some issuers and borrowers produce use of proceeds reports instead of impact reports, others produce both or include allocation and use of proceeds information in impact reports. There is a lot of similarities between use of proceeds reports and impact reports.
One common difference is the reporting of bond/loan outputs rather than impacts. Use of proceeds reports may only report the allocation of funds to each use of proceed and not necessarily the impacts of the use of proceeds.
The tagging works on a self-reported system. If a document is titled use of proceeds report it will be tagged as such, even if it contains the same information as most impact reports.
ESG rating
ESG ratings are provided by ESG rating companies and give a summary of the ESG performance and risks of a company, typically and issuer or borrower. Some sustainability-linked KPIs are predicated on maintaining a certain ESG rating from a certain ESG rating company.
ESG ratings are unstandardised and can vary depending on the rating company. There are calls in the market to standardise and improve transparency in ESG scores.
ICMA information template
A standardised template for providing bond information – filled out by ICMA members and added to the ICMA bond database online
ICMA external review
A standardised template for providing external review information for both issuers and bonds – filled out by ICMA members and added to the ICMA bond database online
Investor presentation
Presentations from road shows or more general investor presentations for an issuer, borrower, bond, or loan. Commonly in slide format but occasionally a pdf.
General
Any document or resource relating to a bond, loan or organisation which does not fall under a resource tag will be tagged as "General". The documents are regularly audited and if a critical mass of a certain document type are being tagged as "General" there are processes in places to create a new resource type tag.
Press release
Official press releases for bonds, loans, projects, borrowers, lenders, lead managers or any other organisation involved in a bond or loan. Commonly provided directly by an issuer, borrower, lead manager or lender.
CBI certification
The Climate Bond Initiative (CBI) provide certification of green bonds which conform to the climate bond standards and has been assured by an approved verifier. Certification requires an additional assurance of post issuance reporting (e.g. impact reports).
CBI certification is not universal, but it passed $200bn of bond value in 2021.
Assurance
Bond assurance is provided by an accounting or auditing firm and reports whether a specific bond or issuance is aligned with a reputable international framework (e.g. ICMA's Green Bond Principles).
Post issuance assurance reports assure the allocation of proceeds to eligible green projects.
Rating report
A report, commonly from a rating agency, which provides indicates the credit quality of a bond and evaluate the bond issuer's financial strength and ability to pay the bond interest in a timely fashion.
External review
Second- or third-party reviews which are not "Second Party Opinions (SPO). These can include verification letters and assessments of bonds, loans, impact reports, and issuers
Resource published dates
If the year but not the specific publish date is known the publish date will be recorded as 01 January of the known year. If the month and year but not the specific day is known the date will default to the 1st of the known month