Energy Efficiency, Green Bonds Need Market Attention, HSBC Says

Green bonds and energy efficiency projects could benefit greatly from relatively minor tweaks in the marketplace, says Kurt Vogt, managing director of sustainable financing at HSBC. Vogt spoke to the Climate Group at Climate Week NYC, and the nonprofit published their brief interview in a blog post.

Vogt notes that it can be tough to invest in energy efficiency projects, because they are often small-scale and fragmented. “A mechanism to aggregate green projects would make it easier to do more business efficiently,” he says.

And the business case for green bonds needs to be made clearer, Vogt tells the Climate Group. “Policy incentives that create even a relatively small change in the price of green investments can drive investors and CFOs to pay more attention to green finance, rather than conventional bonds.”

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Still, he says he has seen “several exciting trends in the green bonds market” over the past few years. Those include growing collaboration between issuers and investors, as well as record investments in low-carbon projects in India and China. Meanwhile, new green bond assessment and ratings initiatives from companies like Moody’s, S&P, Morningstar and MSCI are “driving greater interest in the sector.”

And the ongoing ratification of the Paris accords is driving greater demand for green investment products around the world, Vogt says.

HSBC was one of the top three green bonds underwriters last year, and has committed to invest at least $1 billion in green bonds, according to Vogt. The company’s sustainability strategy in the Americas focuses on four sectors: renewable energy, sustainable buildings, smart cities and sustainable supply chains, he tells the Climate Group.

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