Canada Preps for First Green Bond Issue

Canada’s finance department has chosen HSBC as one of two structuring advisors for its first issuance of green bonds.

HSBC will be joined by Canadian firm TD Securities to advise on the design of Canada’s green bond infrastructure and assist in the development of the program, according to an announcement yesterday (June 14).

Canada joins a wealth of other nations to have issued green debt in recent months, after sustainability-themed bond issuance exceeded $500 billion for the first time in 2020, according to Bank of America (BoA).

BoA’s report, published in February, found that green bond issuance rose 12% to $303 billion, while sustainable bond issuance jumped 82% to $69 billion.

Linda Seymour, president and CEO of HSBC Bank Canada, highlighted that the bank had supported several governments in launching inaugural green bonds, including the UK, Poland, the Netherlands, Chile, South Korea, and Hong Kong.

Since October 2020, HSBC has been prioritizing investment in support of the transition to a net-zero carbon economy. It is working to align its activities with the 2015 Paris Climate Agreement goals, and to achieve net zero emissions by 2050.

The pledge comes as global regulation starts to put pressure on investors with assets in major polluting sectors – fuel, gas, and oil – and as disclosure rules aim to eradicate so-called ‘greenwashing’.

Canada joins nations including France and the US that have issued impact-focused debt in response to Covid-19. France accounted for 18% of the total amount of issuance of bonds tied to specific impact goals last year, with Germany and the US following with 10%, according to research by Insight Investment.