{"id":69059,"date":"2023-12-05T14:53:33","date_gmt":"2023-12-05T14:53:33","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&#038;p=69059"},"modified":"2024-08-19T08:26:18","modified_gmt":"2024-08-19T07:26:18","slug":"mobilising-global-debt-markets-for-a-just-transition","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/mobilising-global-debt-markets-for-a-just-transition\/","title":{"rendered":"Mobilising global debt markets for a just transition"},"content":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p>This report marks the start of a new project between the Grantham Research Institute and Climate Bonds Initiative to support the mobilisation of the labelled debt market for the just transition.<\/p>\n\n\n\n<p>The societal transformations required to build sustainable and resilient low-carbon economies need to be fair and inclusive. To deliver this &lsquo;just transition&rsquo;, significant investment needs to be mobilised. Global debt markets could be a vital source of this finance, and in particular green, social, sustainable and sustainability-linked (GSS+) bonds. However, there is a lack of clarity on just transition elements in bond frameworks, and an absence of tools to assess how those elements align with broader just transition financing needs.<\/p>\n\n\n\n<p>This report looks at the necessity for the transition to take social justice into account and provides an overview of existing frameworks for organisations&rsquo; transition plans and for bonds. It considers how GSS+ bonds could be used to finance a just transition, setting out a methodology to identify existing GSS+ bond issuances that carry elements that relate to a just transition in the energy sector.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key messages<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The bond market is an important source of capital for investment in the low-carbon transition, and the market has made the first moves to reflect the just transition objective in its guidance and bond issuance.<\/li>\n\n\n\n<li>The GSS+ bond markets have grown in recent years, with cumulative issuance reaching US$4.2 trillion, around 4% of the global bond market, as of June 2023.<\/li>\n\n\n\n<li>An advantage of using the bond market for financing a just transition is that a wider range of stakeholders can issue bonds compared with those that can issue equity. These include local and national governments, development banks, supranational institutions, educational and health authorities, non-profit organisations, and special purpose vehicles for infrastructure development.<\/li>\n\n\n\n<li>Emerging economies in particular could use just transition issuance bonds to make progress on decarbonisation and achieving positive social outcomes.<\/li>\n\n\n\n<li>Using a new methodology that identifies GSS+ bonds in the Climate Bonds Initiative Social and Sustainable Bond Database, the report finds that volumes of sustainability bonds that relate to a just transition in the energy sector (the &lsquo;just energy transition&rsquo;) stand at $548 billion, representing 13% of the wider GSS+ market as of July 2023.<\/li>\n\n\n\n<li>Development banks are responsible for the largest share of just energy transition-related bond issuances (48%), followed by the private sector, comprising 17% by financial corporate issuers and 10% by non-financial corporates. Excluding supranational institutions, most of the analysed bonds originated from the Asia-Pacific region.<\/li>\n\n\n\n<li>Labelled bond issuance can have a strong signalling effect to the market around what issues are important to a sovereign, business or financial institution &ndash; including a just transition.<\/li>\n\n\n\n<li>A potential barrier to the issuance of just energy transition-related bonds is the lack of a clear label for such bonds. To address this, GSS+ issuances could include a label to indicate alignment with the just transition, or bond issuances could be made under existing labels (&lsquo;green&rsquo;, &lsquo;sustainable&rsquo;) to avoid market fragmentation.<\/li>\n\n\n\n<li>Referencing relevant Sustainable Development Goals in stated use-of-proceeds categories can also be of benefit, helping investors with their reporting commitments.<\/li>\n<\/ul>\n\n","protected":false},"excerpt":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p>To deliver a just transition, significant investment needs to be mobilised. Global debt markets could be a vital source of this finance, in particular green, social, sustainable and sustainability-linked (GSS+) bonds. This report considers how GSS+ bonds could be used to finance a just transition.<\/p>\n\n","protected":false},"author":57,"featured_media":69060,"template":"","tags":[4582,482,1783,4581,1160,515,4580,1085,4491],"publication-type":[1682],"topic_area":[4707,4708],"class_list":["post-69059","publication","type-publication","status-publish","has-post-thumbnail","hentry","tag-debt-market","tag-energy-transition","tag-green-bonds","tag-gss-bonds","tag-just-transition","tag-sdgs","tag-sustainability-linked-bonds","tag-sustainable-finance","tag-transition-plans","publication-type-policy-publications","topic_area-sustainable-development","topic_area-just-transition"],"acf":{"exclude_from_sync":{"ref_value":"field_560538b0e7350","value":"1","type":false,"post_type":""},"show_translations_widget":{"ref_value":"field_6203d588c41e8","value":"0","type":false,"post_type":""},"downloads":{"ref_value":"field_52f16cc1a80f2","value":["https:\/\/www.lse.ac.uk\/granthaminstitute\/wp-content\/uploads\/2023\/12\/Mobilising-global-debt-markets-for-a-just-transition-policy-insight.pdf"],"type":"download","post_type":""},"rss_newsletter":{"ref_value":"field_54f5c2c1544d8","value":"","type":false,"post_type":""},"profile_link":{"ref_value":"field_52f164b5189e9","value":["nick-robins","brendan-curran","","lily-burge","magali-van-coppenolle"],"type":"relationship","post_type":"profile"},"spotlight":{"ref_value":"field_52f80896506d3","value":"","type":false,"post_type":""}},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - 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