The Canadian climate-aligned
universe
Within this global universe,
Canadian issuers represent a small
but important segment. Canadian
issuers account for C$29.3bn
outstanding climate-aligned bonds
as of June 10, 2015, of which labelled
green bonds represent C$1.3bn.
While the first part of 2015 was
slower in terms of Canadian issuances
than the latter half of 2014, this
pause is likely to be short-lived;
both domestic and external factors
are likely to lead to further market
development in 2016.
Energy is the single largest sector
in Canada’s climate-aligned bonds
market, accounting for 72% of bonds
outstanding. The majority of energy
bonds are for hydropower, though
other renewable energy contribute
to the total, in particular geothermal,
solar and wind.
Transport is the second largest theme
in the domestic climate-aligned
bond universe due to the prevalence
of rail bonds (rail transport is low
carbon, compared to road-based
transportation.)
Waste management and recycling
entities account for the third placed
sector with C$1.1bn. The remaining
sectors are smaller but still key
areas of investment: Buildings and
Industry(C$500m), Mutli-sector
(C$300m (all labelled-green
bonds)) and Agriculture and Forestry
(C$200m).
So far, there are no water themed
bonds in Canada, despite the rush
from south of the border for US
municipalities to finance water
projects with green bonds. Globally,
accelerated growth in this area is
anticipated for the coming years with
the release of the Climate Bonds
Standard for Water and the need for
municipalities to invest in climate
resilience within water conservation,
reticulation systems, drainage, and
improving energy efficiency and
capture of waste water treatment.