Global greening of environmental projects and how you can benefit
Green bonds have been around since 2008 and Australia is catching up.
Key points
First World Bank green bond was issued in 2008.
The global movement for net zero emissions generates a need to fund renewable projects.
There are growing calls for the Australian Government to implement National Seniors Clean Energy Bonds.
Green bonds are a fixed-income instrument designed to finance climate-related or environmental projects.
Green bonds have been around since 2008 when the World Bank launched the Strategic Framework for Development and Climate Change.
Since then, the World Bank has issued around $26 billion (AUD) in green bonds through more than 200 bonds in 25 currencies.
Global green initiatives such as the Paris Agreement on climate change and the United Nations Sustainable Development Goals have helped spur this expansion.
Green bonds now reportedly amount to an estimated market value of around $632.83 billion.
Europe alone needs an estimated 180 billion euros of additional investment each year to achieve 2030 emission targets set by the European Union in the 2015 Paris Agreement on climate change.
The increased global focus on climate change is seeing the rise of environmentally and climate-related projects, so corporates and governments are issuing green bonds to fund them.
Green bonds are increasingly popular in Australia, especially for state governments seeking to raise capital for environmentally or climate focused projects.
The Treasury Corporation of Victoria issued $2.5 billion in green and sustainability bonds last financial year, up from a $300 million offering in 2016.
When Victorian Premier, Dan Andrews, announced the Victorian government’s initial $300 million green bond program (now matured) in 2016, it was touted as a world first.
Now, Bloomberg reports Australian green bond issuance is tracking towards its biggest year-to-date.
With climate reform high on the agenda for the Albanese government, the green bond market in Australia is responding.
New South Wales Treasury reports it has $5.2 billion in circulation in its New South Wales sustainability bond program.
The Australian Government should join the move to green bonds. These bonds are an initiative of National Seniors and an important advocacy component in our budget submissions to successive federal governments.
It is time our Green Energy Bonds were added to the growing list of the nation’s must-do green bonds offerings and proposals.
The bonds support the production of zero-emission renewable energy and are a part of our Healthy Earth, Healthy Future campaign. The campaign voices the concerns of seniors that their children and grandchildren inherit the best possible healthy environment.
Support the campaign and get your message to the government by signing up here.
Renewable energy-producing infrastructure is coming to life with projects like Snowy Hydro 2.0. Many are financed through the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC).
Our bonds play a crucial role in providing the capital to build these projects and provide seniors with a safe investment option that delivers practical environmental and economic benefits for the nation and individual investors.
How it works:
The federal government would create a Better Future Fund to invest in environmentally friendly investments.
The Better Future Fund would pay a dividend to the Federal Government to fund renewable energy infrastructure and a modest return to investors.
Older Australians would purchase Clean Energy Bonds through Australia Post or online to invest in the fund.
Bonds would be available to any Australian citizen.
Individuals will be able to purchase bonds up to a maximum amount.
Multiple maturity options could be offered with different rates of return.
Bondholders would be paid fortnightly or monthly through Centrelink.
For further reading: Probono Australia and National Seniors Australia Geen Bonds Scheme
