CBI launches green agriculture bonds initiative

The Climate Bond Initiative's new Agriculture, Forestry and Other Land Use Expert Group met to discuss eligibility criteria for climate-smart bonds.

The Climate Bonds Initiative, the not-for-profit organisation focused on mobilising the bond market for climate change solutions, has established a working group to develop a green agriculture bond market.

The Agriculture, Forestry and Other Land Use Expert Group will develop eligibility criteria for assets and projects so that they can have “Fair Trade-like labeling for bonds” the Climate Bonds Initiative said in a press release.

This is “designed to make it easier for investors to work out what sorts of investments genuinely contribute to addressing climate change”, it added. The committee held its first meeting last week.

Emissions from agriculture and forestry have nearly doubled over the past 50 years and could increase a further 30 percent by 2050, according to the Food and Agriculture Organisation. Some $14 billion of investment is needed to cope with the adverse effects of climate change on the sector, according to the UN’s climate change department.

The committee includes experts from 13 organisations including the European Investment Bank, USAID and the US Department of Agriculture.

Investor demand for green investments is gathering pace and the green bond market has increased from $11 billion in issues in 2013 to $32 billion already this year..

New guidelines for ‘climate-smart’ bond issuances, due to be finalised in the second quarter of 2015, will help expand the green bonds market into agriculture and forestry projects and assets, it added.