KUALA LUMPUR: The green bond market, which turns ten years old this year, will be an increasingly critical source of capital for projects that will help the global economy limit the impact of climate change, said HSBC Bank Malaysia Bhd yesterday.
In a statement yesterday, its chief executive officer, Mukhtar Hussain, said the green bond market might be a late developer, but it was now critical to financing a lower carbon economy.
“It enables firms to tap the growing pool of cash globally that is looking for climate-friendly investment opportunities and converting those funds into capital for environmentally-sustainable projects,” he said.
HSBC Bank said at present, green bonds still accounted for less than one per cent of the overall global bond market and were rapidly growing as there had been profound changes in the way businesses, consumers and investors perceive the risks stemming from pollution and rising global temperatures.
Meanwhile, technological advances were making more low-carbon alternatives, such as electric vehicles and batteries, economically viable, it said.
The bank said in 2016, over US$90 billion (US$1 = RM4.14) was raised via green bonds, more than double the 2015 amount and that included the first ever sovereign green bond worth 750 million euros (1€ = RM4.87) issued by Poland.
HSBC Malaysia said the Association of Southeast Asian Nations (Asean) region has also increased its focus on green financing as the Asean Capital Markets Forum has collaborated with the International Capital Market Association to introduce Asean Green Bond Standards.
“China’s Belt and Road Initiative is also providing massive investment prospects for green infrastructure initiatives and green bonds are anticipated to become a feature of the financing packages for these projects next year,” it said.
In Malaysia specifically, the Securities Commission recently announced the issuance of the country’s first green sukuk under its Sustainable and Responsible Investment sukuk framework and fortified Malaysia’s position as a leading Islamic finance marketplace, it said. — Bernama