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California Debt and Investment Advisory Commission

In Collaboration With
Goldman School of Public Policy University of California Berkley

UC BERKELEY’S
CALIFORNIA GREEN BOND
MARKET DEVELOPMENT COMMITTEE
Presents a Webinar Series:

Green Bonds in the Golden State: A Practical Path for Issuers

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Note: The complete program including, replays, transcripts, and slides are available in the CDIAC Education Portal.
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The market demand for investment opportunities that advance environmental and socially responsible goals has grown dramatically. Increasingly aware of the growing market, elected leaders and their constituents across the country have begun to demand policy that matches the climate friendly attributes of infrastructure projects with complementary financing structures. Resultantly, green bonds have emerged in the past few years as a viable financing strategy for issuers investing in low-carbon and environmentally friendly infrastructure. Join us in this free three-part webinar series, which has been designed to provide public finance officials with the practical guidance needed to meet the green financing demands of their constituency. Participants will gain a clearer understanding of the risks and benefits of a green bond issuance and how to strike the proper balance between financial and environmental stewardship.

Session One: Green Bond Fundamentals

Originally Aired: August 14, 2019

The program will provide participants the basic understanding of green bonds through a report on the status of the market globally and in California, and an explanation of current growth impediments and indicators of future market expansion. It will decode the fundamental vocabulary, explain the conventional thought on what green is or isn’t, address the differences between green and traditional bond financing structures, and clarify the distinctions between the types and stages of green label substantiation required over a green bond’s life cycle.

Robert Hannay, Treasury Manager, East Bay Municipal Utility District
Michael Paparian, California Representative, Climate Bonds Initiative

Session Two: It’s Not Easy Being Green

Originally Aired: September 18, 2019

The evaluation of the opportunity to issue green bonds to finance critical infrastructure begins at project conception. This session focuses on the practical elements of project evaluation, the plan of finance, and the certification model that positions a project for the most advantageous green issuance. Issuers will learn about the policies and procedures that need to be in place for the verification, reporting, and disclosure that meets the expectations of the green bond market while managing the variety of risks presented by green bond issuance and remaining accountable to investors and taxpayers.

Moderator: Michael Paparian, California Representative, Climate Bonds Initiative
Kevin Civale, Shareholder, Stradling, Yocca, Carlson & Rauth, P.C.
Dr. Cris Liban, Executive Officer of Environmental Compliance and Sustainability Program Management,
Los Angeles County Metropolitan Transportation Authority
Monica Reid, Chief Executive Officer, Kestrel Verifiers

Session Three: Making Green Pencil Out

Originally Aired: October 2, 2019

There is an undersupply of green bonds, yet premium prices for green bonds have not yet been realized. So what do they want from us? This session will focus on the market’s perception of green bonds and the characteristics of issues and issuers that are most preferred by investors. How can an issuer differentiate their issue in a manner that leads the pack toward premium pricing, and will it be worth it? Do the sustainability strategies of green bond issuers improve their market standing and credit profile, generally? Participants will be better prepared to evaluate the potential benefits of green bond issuance as good stewards of the public’s funds and trust.

Moderator: Tim Schaefer, Deputy Treasurer, State Treasurer’s Office
Raul Amezcua, Managing Director, Stifel
Jenny Poree, Analytical Manager and Head of Municipal Cooperative Utilities, S&P Global Ratings

Series Resources

International Capital Market Association (ICMA)

An organization who administers the guidance and governance of the Green Bond Principles (GBP), which are the leading framework globally for the issuance of green, social, and sustainability bonds. Their available resources are extensive, most applicable to this webinar series include:

  • Green Bond Principles (GBP) 2018
    Globally leading voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for the issuance of a Green Bond.
    • Guidance Handbook, June 2019
      A list of FAQs that are, in part, intended to assist green bond market participants with the interpretation of the GBP and for the practical application for transactions.
  • Handbook – Harmonized Framework, June 2019
    Outline of core principles and recommendations for impact reporting in order to provide issuers with reference and guidance for the development of their own reporting and provide core indicators and reporting templates for Energy Efficiency and Renewable Energy Projects.

California State Treasurer

Climate Bonds Initiative (CBI)

An international, investor-focused not-for-profit that is the only organization working solely on mobilizing the $100 trillion bond market for climate change solutions. They produce market updates as well as many other reports and resources on the green bond market. Resources most applicable to this webinar series include:

Governor’s Office of Planning and Research / Integrated Climate Adaptation and Resiliency Program (ICARP)

Created the Adaptation Clearing House, which serves as a centralized source of information and resources to assist decision-makers at the state, tribal, regional, and local levels when planning for and implementing climate adaptation and resiliency efforts across California. They have Tools, Datasets, and Research to support California planners and decision makers. Research most applicable to this webinar series include:

Miscellaneous

  • Cal-Adapt.org
    Provides a view of how climate change might affect California. Find tools, data, and resources to conduct research, develop adaptation plans and build applications.
  • Green California
    Example of impact reporting. Website contains data on the impact of state-owned green buildings and vehicles, including energy usage, water usage, and greenhouse gas emissions.
  • Paying it Forward: The Path Toward Climate-Safe Infrastructure in California, September 2018
    AB 2800 (Quirk, 2016) mandated that a panel of scientists, registered engineers and architects be convened to help the State of California understand how it can best incorporate forward-looking climate information into the state’s infrastructure design, planning and implementation. The panel, titled Climate-Safe Infrastructure Working Group (CSIWG), produced this report to examine how climate change impacts can be included in infrastructure planning, design, and implementation processes. Most applicable to this webinar series is Chapter 8, Funding Infrastructure: Trends, Needs, Challenges and Tools.
  • Green Bonds: A Short Term Trend or a New Way to Finance Public Infrastructure
    A two-page article that provides an overview of Green Bonds, why Green Bonds should be considered by issuers, the Green Bond Pledge, and the incremental cost of issuing Green Bonds.
  • About Green Bonds, MSRB, 2018
    Overview of Green Bonds issued by municipal entities and discussion of considerations for investors who may be considering investing in Green Bonds.
  • Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds, October 2018
    Authors: Malcom Baker, Daniel Bergstresser, George Serafeim, Jeffrey Wurgler
    Study on the pricing and ownership pattern of Green Bonds. As predicted, they found that green municipal bonds are issued at a premium to otherwise similar ordinary bonds. They also confirm that green bonds, particularly small or essentially riskless ones, are more closely held than ordinary bonds. These pricing and ownership effects are strongest for bonds that are externally certified as green.
  • EasyXDI
    A product that allows self-investigation of climate risk to buildings and infrastructure. In a simple three-step process, users select asset type, location, and asset life span then click for analysis. EasyXDI quickly returns projections of risks and insurance costs covering flooding, tides, storms, droughts, wildfires and heat-waves.