New standards for green finance just published.
Trillions of dollars. That’s the estimated amount of money it will take to reach net-zero carbon goals and mitigate climate change. Green finance, including green bonds and loans, is one way of getting there, but a lack of harmonized definitions of what constitutes “green” threatens to slow its growth and allow greenwashing to take hold. A new series of ISO standards has come to the rescue.
ISO 14030, Environmental performance evaluation – Green debt instruments, provides an internationally agreed roadmap for issuing a green bond and originating a green loan. The new standards cover the principles, requirements and guidelines for designating as “green” those bonds and loans which finance eligible projects, assets and activities; for reporting on the use of proceeds; and for monitoring and reporting on their environmental impacts.
Dr John C. Shideler, Chair of the group of experts that developed the standards, said the ISO 14030 series will help to ensure the credibility and harmonization of best practices in the green finance sector, thus helping to boost the market. “The use of these standards is aimed at eliminating confusion and greenwashing, thus improving confidence in the market. This, in turn, should not only result in greater investment and investor confidence, but deliver more environmental benefits as well,” he said.