Green bonds are seen as an important tool to shift money flows to environmentally friendly projects, and to achieve the carbon reduction targets under the Paris Climate Agreement. In 2019 there were US$259 billion new issues in the global green bond market, and its growth in Asia Pacific has jumped by 29%.
This is an Oxfam Hong Kong research report prepared by Carbon Care Asia aiming to answer two questions increasingly asked by sustainability-conscious investors and civil society organisations amidst an exponential growth of green bonds: how much have green bonds contributed to the stated environmental goals, and has there been adequate attention placed on the social impact of projects funded by green bonds?
Based on an analysis of 249 green bonds issued in Asia in 2018-2019, CCA researchers found that 83% of the issuers disclosed the sustainability context of their bonds, yet only 3% of issuers mentioned climate resilience measures in the green bond frameworks despite claiming to contribute to climate goals, and a mere 1% indicated that they adopted best available technology in project design. As far as local communities are concerned, only 6% of green bond issuers adopted a process to identify the social impact of their bonds and 4% embraced a process to manage social risks.