Cash & Liquidity ManagementInvestment & FundingCapital MarketsClimate Bonds Could Finance Chemical Sector Investment

Climate Bonds Could Finance Chemical Sector Investment

So-called ‘green bonds’ offer significant potential for financing capital investment in the chemical industry according to Sean Kidney, chief executive officer (CEO) of non-profit organisation the Climate Bonds Initiative.

Speaking in Milan at the fourth Italian national conference on chemistry and energy, he noted that according to the HSBC/Climate Bonds report
‘Bonds & Climate Change 2013’
, green and climate bonds are already a US$346bn sector, with issuance growing by 25% during 2012.

“The latest science shows that carbon emissions in industrialised countries will need to drop by at least 90% by 2050 in order to avoid severe climate change.” Kidney said. “The still largely petroleum-based chemical industry can play a leading role in this process.

“First, substantial progress is being made in switching to renewable biological feedstock. These are important developments in terms of a shift to a low-carbon industry.

“Secondly, the International Energy Agency (IEA) estimates that some 40% of investment in reducing greenhouse gas emissions to 2050 will be in energy efficiency. With an estimated 9% share of global energy use and large numbers of older plants, huge plant energy savings can be made with appropriate capital investment.”

The Climate Bonds Initiative, an investor-focused non-profit organisation promoting large-scale investment in the low-carbon economy, is examining the inclusion within its eligibility criteria of bonds used to finance such investments.

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