- An Innovative Digital Tool that Brings Greater Transparency to Latin America and the Caribbean Green Bond Market in a Bid to Scale Up Green Financing for the Region
The Inter-American Development Bank (IDB) and IDB Invest announces the launch of the Green Bond Transparency Platform (GBTP) , an innovative digital tool that brings greater transparency to the green bond market in Latin America and the Caribbean.
GBTP supports the harmonization and standardization of green bond reporting, boosting investors’ confidence that the proceeds from bond issuances are being spent on green projects whose impact are adequately measured. Users can learn about the proceeds, impacts, and methodologies for each green bond in the region and can filter data to access environmental performance using different criteria. Blockchain (DLT) technology facilitates secure data reporting in the GBTP.
The online digital tool supports IDB efforts to scale up the green bond market in the region and helps national and municipal governments, financial institutions, and companies to access the financing they need to tackle climate change and make environmentally sustainable investments.
Worldwide, the green bond market reached a record issuance of $1.1 trillion by 2020. Latin America and Caribbean represent 2% of this market with large upward potential. Since 2016, the IDB Group has significantly helped the region’s green capital market by supporting more than 30 percent of the issuances by volume.
“Greater transparency is key for boosting investor confidence that Latin America and the Caribbean is making sound green investments and, thus, make them feel comfortable in increasing their investments in the region,” said Juan Antonio Ketterer, Division Chief of the Connectivity, Market and Finance Division at the IDB.
“GBTP is the first tool which makes information accessible and comparable to everyone interested in participating in the region’s market, free-of-charge,” adds Ketterer.
The GBTP answers key questions including:
- Which issuers have issued green bonds?
- In which projects were the proceeds of green bonds invested?
- Which projects did create which environmental impact?
- Which green bond frameworks and issuances received certifications and external reviews pre- and post-issuance and who conducted the external reviews?
- What is the green bonds’ impact in the region’s market and in investment portfolio?
In that regard, Sean Kidney, the CEO of Climate Bonds Initiative (CBI), a partner organization, mentioned that the “GBTP contributes to the dissemination of best practices within the green bond market, at this important time when governments and other institutions focus on the green transition. It will greatly support the standardization and harmonization of green bond disclosure, especially around post-issuance reporting - this is valuable to a range of stakeholders, including investors”.
The GBTP, which seeks to be taxonomy and methodology neutral, has been tested in collaboration with more than 40 key market actors, including standard setters, issuers, external reviewers, underwriting banks, investors, and funds, such as KfW’s Latin American Green Bond Fund. The IDB provides free technical support for issuers and external reviewers interested in utilizing the GBTP features.
This innovative tool is a user-friendly public good that offers unrestricted data access to all users, thanks to technical assistance resources provided by the German Ministry of Environment International Climate Initiative (IKI) and resources by the Swiss State Secretariat for Economic Affairs (SECO).
The GBTP team has been working with data platform innovators such as the Luxembourg Stock Exchange’s LGX DataHub, the Nasdaq Sustainable Bond Network (NSBN), Environmental Finance, and as part of ICMA’s impact reporting technical working groups with a view to facilitate cross-platform data sharing and harmonized nomenclatures.
In that regard, Julie Becker, CEO of LuxSE and Founder of LGX, mentioned that “through our collaboration, IDB and LuxSE have contributed to avoiding market fragmentation and making sustainability data comparable at an international level. We will continue to work jointly on harmonization of sustainability data to facilitate transparency with green bond issuers in Latin America and the Caribbean”.
In addition, the Head of the NSBN, Ann-Charlotte Eliasson, said that “in order to expand the Nasdaq Sustainable Bond Network into a global platform for increasing transparency on the sustainable bond market, collaboration with strong local partners such as the IDB is crucial. Through our partnership, we are able to provide high-quality data to benefit the public good through the GBTP, while also providing the Nasdaq Sustainable Bond Network with coverage of the expanding Latin American sustainable bond market”.
Finally, Claudia Arce, the director of Latin America and the Caribbean of KFW Group, a platform partner, highlighted that the GBTP “is a great initiative to enhance transparency, comparability and accessibility of Green Finance data to investors. It has been a rewarding experience to support its inception. We will use the platform and we encourage all our partners in the region to do this as well”.
Visit and learn more on the Green Bond Transparency Platform here.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.
About the IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.