AB: Financing a Sustainable World - Global Banks Take Center Stage - Seite 2

Driving global development. Itaú, a major retail and commercial bank in Brazil, has been an early emerging-market adopter of GSS bonds. Its Sustainable Bond is flexible and funds renewable energy, micro enterprises and middle-sized enterprises in Brazil's poorest regions. This bond is used as a template for a partnership between Itaú and the International Finance Corporation (a division of the World Bank) to channel additional socially focused funds into Brazil. The bond strongly aligns with SDG 8, "Decent Work and Economic Growth."

Transitioning from bank lending to green bonds. There are many examples worldwide of renewable projects that are first financed by banks, then refinanced in the bond markets. For instance, since the late 1990s, Citibank supported CMI Energía (the largest renewable power generator across Central America) with bank loans in the initial stages of the company's renewable journey. Renewable plants are relatively small, and individually their financing needs cannot justify a green bond issue. After issuing a series of loans to CMI Energía, in 2021 Citibank underwrote a US$700 million green bond deal in the capital markets. This allowed the bank to free up its balance sheet, enabling continued lending for sustainable purposes both to CMI Energía and to other businesses.

Sustainability Begins at Home

Environmentally aware banks are leading in decarbonizing both their own operations and their loan books, and in advising and financing their clients' sustainable developments. Dutch banks have assumed a pioneering role in many respects.

For example, Netherlands lender Rabobank now has explicit criteria for providing green financing. The bank insists that buildings built before 2020 must "belong to the top 15% of national building stock based on primary energy demand" or, if built after 2020, must have an energy consumption score "at least 10% lower than the threshold set for the nearly zero-energy building (‘NZEB') requirements in the local market." Rabobank's very direct and specific rules contrast with more nebulous use-of-proceeds requirements that we're seeing in recent green bond issues from industrial companies.