At the end of January, Citi launched a €500 million green bond – its first green bond – and in February Bank of America launched a $500 million social bond – its first social bond and indeed the first social bond from a US bank. Both were oversubscribed and priced tighter than expected.
Citi’s green bond is important for many reasons, not least because it shows there is enough green infrastructure and project lending being done to put it together. But also – it is American. Other than by Bank of America and Morgan Stanley, there just hasn’t been enough green bond issuance by US banks.
We need large US investors other than CalPERS and church pension funds to get more comfortable with green investing. Seeing familiar Wall Street names issue bonds helps that cause. Having another US bank join the green bond foray will also hopefully nudge JPMorgan to follow – its absence from the green bond market is becoming an elephant in the room.
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BofA’s social bond was also a great step in the right direction for sustainable finance.
