We're good, Connie. Hello and welcome to this World Bank side event on targeting green bonds, credibility and taxonomy. A recent headline in the Financial Times expressed a simple sentiment by normal people, not governments, not companies. Can my money help save the planet? And of course, the answer is a simple yes. It is in fact core. So the right allocation of finance and financial flows is an essential part if we want to achieve our Paris Climate Agreement and a carbon neutral. by 2050 or 2060, but what is right? What is green? What is sustainable and climate friendly? After all, green bonds already have a twelve-year history, and, uh, that was, uh, because the World Bank introduced the concept around a decade ago. It's getting traction everywhere, spreading fast around the globe, maybe with a Small percentage of the market as a whole, yet one of the fastest growing segments. So the question of taxonomy and credibility has come into play. What really does constitute green investment? What are reliable indicators? How can we around the globe agree on one concept, one taxonomy, or don't we just need one standard. Today, we'll explore many of these questions and find out. Diversified answers and look at pathways to 2030 as a first stepping stone. So your interest, ladies and gentlemen, around about 300 of you have actually signed up for this program, is proof of the importance of green bonds and the right strategies, and thank you very much for being with us. Of course, you can put your questions, your remarks into the chat on the right-hand side. And just in case, if you want to To have the perfect view of what is going on, uh, on the panel. There is the layout button, and if you choose stage setting, um, then you'll be fine. My name is Connie Schimmock. I'm your moderator today, and now I would love to introduce your host for both welcoming and introductory remarks, the German Executive Director at the World Bank, Gunther Bger. Gunther, the floor is yours. Yeah, thank you, Connie, and I would like to welcome you all to this side event and a very warm welcome, especially to our keynote speakers and panelists. I also want to thank the audience representing governments, ministries, the World Bank, and the IMF staff from around the world for taking time out of their business schedules to discuss how we can make green bonds even more credible and effective. Last fall, we organized an event on green bonds after Germany had just issued its first green bond structured as a twin bond. This time, we will discuss what makes green bonds green. How we can trust the label, meaning how we know that when we buy green bonds, there will be a positive impact on the environment. The current pandemic has caused substantial damage to people and economies worldwide. The World Bank is working constantly to provide financing to governments, enabling them to tackle the most severe impacts of this pandemic in their countries. But of course, much more financing is needed in the developing and the developed world to reduce the economic and human strains and to help economies recover. At the spring meeting, the World Bank launched a new green resilient and inclusive development strategy to help countries invest in sustainable, climate-friendly, and green infrastructure. According to the Global Commission on the Economy and Climate, the world needs to invest about $90 trillion US dollars on green infrastructure in the period up to 20,130, more than the entire current stock today. These green investments are essential to direct our countries and our world to a low carbon or even carbon-free future. A significant amount of financing also needs to be provided by the private sector. Green bonds appear to be a particularly promising tool to finance green infrastructure and green investments on corporates, given that bond markets around the world are well established. The World Bank, as well as a growing number of political decision makers and financial leaders, are calling for governments to provide investors and issuers with a clear understanding of what green bonds should and could be. The taxonomy is a key element to enable issuers and investors to credibly classify bonds as green bonds. This is the cornerstone to develop a well-informed and efficient marketplace for sustainable financial assets. Now I am looking forward to guidance from the German Ministry of Finance and the World Bank, speaking about their experience with green standards. We will then follow up with a lively discussion among sovereign issuers such as China, Nigeria, Chile, and Colombia, and investors from PIMCO and APG Asset Management, followed by the EU who will discuss what makes green bonds green. What investors are looking for and to what extent we need to agree on a global standard. I would like to stop here and look forward to highly interesting contributions and discussion and hand over to you, dear Connie. Thank you very much. Thank you so much, Gunther, and uh thank you for hosting this session. Now, in the next 20 minutes, ladies and gentlemen, we will roll out the red carpet to two actors that are eminent in shaping the development of green bonds. Uh, we will, in a couple of minutes, uh, hear about the big picture, the strategy on green bonds by the man who co-created the concept of green bonds and has been driving the expansion of green sovereign bonds together with his team at the World Bank's Treasury, Jin Yonghua, wise. President and treasurer of the World Bank, and we all know that it is the sovereign and government-related green bond segment that is enjoying spectacular growth as countries take up the environmental challenge. So first, we will have a look at the very recent experience Germany has had issuing its sovereign green bonds successfully when one looks at the amount of awards the concept has already won, and of course by being lapped up. By the market in the briefest of times. So the concept involves an innovative twinning of green and traditional bonds. The rationale behind it, i.e., how it is embedded in the country's political climate policy, and the details of the concept will now be shared, and we're very happy he took the time by the State Secretary in the Federal Minister of Ministry of Finance of Germany, your Kies. Mr. Koies, over to you in Berlin. Please take the floor. Thank you and uh many thanks for the kind words, um, uh, you've raised the bar um of expectations now very high, so I hope I can meet those. um, and, uh, for us, of course, the, um, dealing with the pandemic um in this uh global challenge is uh is one of the, um, sort of side currents that we had to issuing the green bonds, um, obviously the protection of health, uh, the Climate and uh social protection are of key importance for governments worldwide. Um, of course we had the green bond program, um, rolled out before the pandemic hit, but of course actually implementing it during the pandemic then was an additional challenge and, um, of course also an additional um ambition. Um, we want of course this transition. A sustainable economy as soon as possible. Germany and Europe are in the middle of preparing a comprehensive structural change towards a sustainable and carbon neutral economy. So in that sense, obviously investment and finance are key components of that, and we will try to sync up the financing with the actual environmental policy. The green bunds are not only part of the German Climate Action Program 2030, but also a key component of the federal government's comprehensive sustainable finance approach. So we're trying to combine finance and climate climate action plan into one concept. The green bonds, of course, as a general principle combine and pool the issuers green expenditures and thereby create transparency. Although the demand for green and sustainable financial products is growing fast, green bonds, despite all of the issuance that we've seen in the past year and past 2 years, is still a niche product. We want to change this, and we want to be as one of the leading issuers in the eurozone and the EU become a part of the green bond family. We were a bit late to the game, but we are very committed to the game now, and By issuing the green federal securities on a regular basis, wants to make a significant contribution to deepening the market and making it more liquid and more tradable, and building out the curve gradually over time will certainly make it very tradable and transparent and a good pricing benchmark and also be a contribution thereby to the capital markets union in Europe. Um, after we've prepared carefully for the issuance of our green bonds, we, um, successfully issued our first security, um, last year with a total volume of 11.5 billion, um, in our twin green bound, um, security. Um, the, um, 1st 10 year, this was a 10 year bond, we, um, ended up selling a volume of 6.5 billion, um, then, um. Um, that was issued by a syndication and met with very high demand both nationally and internationally. The final order book, um, exceeded €33 billion. The bond was allocated to a very diversified group of 185 investors. Um, then we followed that up in November, with a 5 year federal note, um, in a, in green bond format, um, with a volume of 5 billion. The green bubble was then issued via the usual auction process procedure, um, and 26 members of the bound issues auction group participated. So that was a nice follow on with the shorter 5 year bond to the initial 10 year. So, um, we have a few innovative features that we think are important for us, um, especially because, of course, the bund is a traditional, um, um, um, pool of liquidity and depth of the market. So in that sense, um, all of our investors told me, if you want to issue green bonds, um, and making sure that the quality of the liquidity um of your um. Your bond portfolio is uh maintained was really of the essence, so that's uh something that uh that really, um, that really, um, made us think about the so-called twin concept. So essentially what do we do, um, we first issue, um, a plain vanilla standard bond, um, with just conventional features with no green commitment, um, we then, Shortly thereafter, once that bond has started trading and is established in the market, issue an economically identical bond that has a different II though, and that is a green bond, and so the difference between the two economically um identical, both in terms of tenner and coupon, etc. and documentation. Um, is that the green bund carries the green commitment to it. Um, the green bund can be switched for its conventional twin, um, in a combined sale and purchase, uh, um, transaction that is being administered by our federal debt agency Finance Agentu. Um, so in that sense, that is the concept where you add the green concept with liquidity. So in that sense we try to do our best there, um, and, um, and, uh, so far so good, it's been accepted by the market, and a lot of investors are telling us that this ability to, um, transact, um, large quantities without having to accept uh price concessions through the sale and purchase transactions is something that, uh, that is really helpful to them, um, and, um. And importance to maintain the the gold plating standard of high liquidity in the bunds. The other point that is important, of course, in the twin bond concept is it directly allows a price comparison. So in that sense, because the two bonds, the conventional bond and the green bund twin, have the identical economic terms, the green bund is in addition. Has the green commitment, um, you can see exactly how the market prices this green commitment. So in that sense, um, the, that, that provides quite a lot of price transparency, um, and you can also see how this, uh, this, uh, um, premium, um, at which uh green bonds trade, um, called the greenium in modern terms, um, is actually priced across the curve. So, um, in that sense, it's quite interesting, um, we saw an initial discount. Um, uh, on both of the, um, um, features of about 1 to 1.5 basis points, um, that has now increased to around 3 basis points for the 5 year tenure and around 5 basis points for the 10 year bond that uh that uh we actually get uh at the end of the day, cheaper funding through the green bond than the conventional bond. So in that sense, it's also a benefit to the German taxpayers, which is also nice. Um. With regard to the investor base, we we're also very positively surprised. The 10 year bond was purchased by 185 different investors, as I mentioned, um, um, before already, um, of this number of 185, around 1/3 were investors that, um, already helped develop the green bond market, um, were established green bond, green bond investors. However, um, and that I think is also important in terms of deepening the market for green bonds. Um, um, the, the majority of investors that came in, um, were either cautious or not involved at all in green bonds. So in that sense, um, I think we really established, um, an entry point into green bonds, especially, um, some, um, central banks in Europe, um, did their first, um, green bond investments through our, um, securities. Several Treasury departments of banks did the same. So in that sense, I think it's important, um, and they all very explicitly mentioned our twin bond concept as opening the door for them because of their, of course, um um high liquidity needs if they need to transact. So in that sense, that was a positive signal also from new investors and opening up the green bond markets to new to new constituencies. Uh, transparency, of course, is of the essence um and. Uh, therefore, the whole question of how do we report and what do we give in terms of disclosure is important. Um, we are about to publish a an allocation report um that is done the year following the issuance, and it gives details regarding the spending to which the bonds issuance proceeds can be allocated. The proceeds, um, contribute um to financing the budget as a whole, of course, but um, we, um, we, um. Of course, in in the allocation report specify that and say exactly which green goals and which climate goals um are being reached through the financing of uh of the green bound. In addition to that, we've committed ourselves to transparent reporting on the impact on the environment and on climate um of the green spending allocated to the proceeds of the green bounds, um, so that's what we call the impact reporting or that's known as impact reporting. Um, um, and that will be, um, published between 1 and 3 years after the bond in question was issued. Um, at least once during the lifetime of the bond, um, is the minimum at which we'll, um, publish this, um, but, uh, we may do more. Um, so as I said, the, um, the allocation report is about to be published. It will follow the the German green bond framework and the ICMA principles, um, and it will contribute to the whole transparency and then the. Impact reporting is um provided for 22. And last but not least, what's the outlook? Um we will continue issuing. Um, we're very excited that um we will um issue um a 30 year green bound um in this year. So in that sense, that will be um new, um, and, uh, um, will come shortly, um, as soon as May. And in September we're planning to issue another 10 year green federal bond. So then we'll have the curve being gradually built out and we're very excited and hoping that a lot of investors have gained interest maybe through these through this statement as well. We're always happy to welcome new investors in our green bounds. Many thanks for your attention and I'm happy to take questions afterwards. Lovely. Uh, please don't run away right at the moment, um, Dirk, uh, because we're gonna have, uh, and here Jing Yan Hua first, and, uh, then we'll be continuing with a very quick, uh, Q&A. And of course, if you issue 30-year bonds now, uh, it'll take us 1 year after 2050. So, uh, maybe, maybe we can shorten them to 29 years. Anyway, good idea, um, and, uh, an early. Proof of practice, you need forerunners for a concept that spreads around the globe. As you all know, the World Bank, especially the Treasury, was such a poor thinker and a role model alike. In November 2008, the World Bank's first green bond created the blueprint for sustainable investing, and it has come a long way since then. The demands of climate change fulfilling our global commitment to Reducing greenhouse gas emissions and the recent backlash due to the pandemic are the backdrop to developing national green taxonomies to support sustainable investments from evolution to revolution. Again, we're happy that you, sir, carved out the time to be with us today. Jing Donnghua, vice president and treasurer of the World Bank. So please share your eagle's view. Um, Connie, thank you very much. Uh, good morning, good afternoon, good evening, uh, colleagues and participants, and my fellow panel, uh, fellow panelists. Uh, I'm honored to be invited to share our experiences in Green Bond in sustainable development and in taxonomy, uh, uh, uh, development. So, but let me first congratulate the government, German, uh, uh, Germany and, uh, Mr. Kies for your very successful issuance of the inaugural sovereign Green Bond. And the creation of a green bond program. Uh, indeed, having seen the transformation of the green bond market over the past decade, where, where the World Bank played an important role, I'm certain that German sovereign issuance in green bond will usher in a new era to scale up the, uh, climate financing. We all know that uh COVID-19 has brought on unprecedented challenges on poverty, inequality, and on climate change. How do we ensure that we can embark on a great, inclusive, and resilient development path? We call it GRI. Uh, post-COVID-19 is a major theme of the spring meeting and, and I thank the German ED's office, uh, for organizing this important A discussion on climate change on green financing. We, of course, at the World Bank is fully committed to supporting environmentally sustainable investment, both through our own financing, but by working with others to mobilize much-needed investment in low-carbon products and green initiatives. Uh, our president, uh, David Malpas, just announced last week. Uh, on our priorities on climate change. Uh, the World Bank Group is already the largest multilateral provider of climate finance. We are now increasing our climate finance. Uh, finance to 35% of our annual program. This represents a big step up from the 26% achieved on average uh in the past 5 years. And the World Bank is committed to fully aligning its financing to the Paris Agreement by 2023. As Connie mentioned, at the World Bank Treasury, we are fully focused on raising funds from the capital market to lend to our member countries so that they can address the need of the pandemic and rebuild their economy, uh, in a greener, cleaner, and more resilient way. Uh, last fiscal year, which ended, uh, June 30th of 2020, we raised the US dollar $75 billion. And uh in this fiscal year, uh, uh, to date, we have already raised 63 billion. Uh, and since Mr. Kukis mentioned the dual tranche green bond, yesterday, we issued a very successful dual tranche sustainable development bond. Uh, and we issued a 3 billion two-year and $5 billion 5-year, uh, uh, uh seven-year, sorry, for a total of 8 billion uh with the order book of 14 billion. achieving some of the tightest spread to US Treasury. Indeed, indicating using the power of the credibility, we can connect global savings to, uh, green financing, to development financing in a very, very efficient way. Um, So I believe there is now consensus that the economic recovery and transition to a sustainable and climate-neutral economy must go hand in hand. And that means fiscal policymakers need to support green investment and help countries transition away from carbon-intensive industries to drive sustainable, inclusive, resilient economic growth and generate great employment opportunities. That will help us recover from the crisis. Unfortunately, grain is still an esoteric term for many of us who work in finance. The lack of clarity about what grain is and what qualifies as green economic activities has long been identified as a major obstacle and bottleneck to scaling up green investment. The chorus for green taxonomy was born out of this need to fill the gap. So indeed, the green taxonomy can help financial sector participants, whether it's Ministry of Finance, market regulators, banks and financial institutions, or investors, determine quickly and efficiently whether an economic activity or project qualifies as an environment friendly or not in a specific context. Such a system allows them to take their assets consistently and engaging accurate and transparent tracking and reporting. So I'm sure many of us, especially those of us who are in, uh, who are financial specialists, never heard of the term green taxonomy until the European Commission put forward an action plan, action plan on financing sustainable growth, which included establishing an EU taxonomy for sustainable activities. Uh, in fact, a few other countries had approached this word much earlier. Uh, for instance, in September 2017, the Central Bank of Bangladesh, considered a pioneer an early champion of sustainability among central banks by the sustainable banking Network and many others. created a, a similar list of green products to encourage banks and financial institutions to increase the share of green lending in their portfolio. Likewise, the People's Bank of China had published a green bond indoors project catalog in 2015. To make it easier for financial institutions to issue green bonds. And I, I'm looking forward to hearing from our panelists, Doctor Ma Jun, who led the effort. Uh, we welcome and applaud all these efforts to identify what should be considered grain in each local context. Uh, as kindly mentioned again, uh, as a World Bank treasury, we have been a forerunner and a pioneer in raising funds from the international capital market for sustainable financing in emerging market. We issued the first labeled green bond in the world in 2008. And the transparency and governance standard we helped to establish have now come to be accepted as international best practices for the ease units of market-based sustainable financing instrument. This included working with the International Capital Market Association and other market participants to establish the green bond principles. We also have a sustainable finance advisory program that promotes sustainable capital markets and provide technical assistance to facilitate the issuance of grain and other sustainable financial instruments in, in, in emerging market. Uh, so I'm glad to see, uh, uh, many of our partners, including from Nigeria and Colombia participating in the panel discussion today. We work with the regulators to create the kind of enabling environment in which projects that generate positive social and environmental benefits can secure easy access to deep and liquid market. So as part of that effort, uh, uh, we launched a guide last year on how to develop a national grain taxonomy, uh, for financial regulators in emerging market. Uh, with decades of experiences supporting countries in their transition to low carbon economies through projects we finance, the World Bank is in a unique position to develop recommendations that take into consideration the specific national context of emerging economies. In fact, we were working with the Malaysian Central Bank, Bank Nagara Malaysia, and Ministry of Finance Colombia. At the same time, Uh, when the EU Sustainable Financial Technical Advisory Group was working on their taxonomy. We felt it's important to capture the lessons learned and provide recommendations for the drafting of nationalgra taxonomy, uh, uh, uh, to share this with, uh, with others. So we are happy to see the interest that this has sparked among regulators. Mongolia, Russia, and Kazakhstan have already developed green taxonomies. Uh, Colombia, South African, and Dominican Republic are deep in the process. We hope the methodology and recommendation uh approach will benefit them as they seek pathways to build a more environmentally sustainable future. Well-developed grain taxonomies based on sound scientific evidence and aligned with national development objectives can support regulatory interventions to encourage lending to eligible grain industries, uh, help banks and financial institutions structure green financial products, and fulfill reporting, reporting and disclosure requirements. And encourage the issuance of green bonds by making it easier to identify green assets that meet investors' expectations and criteria. Uh, this last point is what the panel discussion will focus on today, I believe. There are advantages to developing national taxonomy harmonized with those in major capital markets. For instance, to support inter uh intra-market capital flows. We will continue to support efforts to build international standard for grain taxonomy with a view towards how such standard can be applied to developing countries and emerging markets. This is similar to what we did in the case of the green bond principles. So in that context, we feel it will be important to ensure any such taxonomies are ambitious on one hand, but realistic on the other, so that they are aligned with environmental objectives that reflects the country's development stage and development strategy and the level of financial sector development. We look forward to partnering with German, uh, uh, Germany and other countries to forge further international consensus and build the green bond market worldwide. So I'm very eager to hear different perspectives on how green taxonomies can boost transparency and further scale up financing for environmental-friendly projects, uh, with the emerging market becoming a major component of the global effort and solutions. The last point I want to, to, to make is that uh in the World Bank, in addition to the green bond Program, through which we have issued $14 billion worth, we are also using the sustainable development bond label to draw attention to broader development issues from ocean pollution. to food laws and ways to gender, education, so on and so forth. So I, I just wanted to use this opportunity to, to say that green bond climate finance remains central. We also, at the same time, wanted to achieve the broader SDG goals and let's work together to get it done. Thank you very much, Connie, and thank you for listening to me. Back to you. It's absolutely fabulous, uh, Jingdong. Thank you so much. Uh, we're going to, uh, count on you being, uh, there in the last round, uh, but I'll have a question for you in a moment. Uh, I just know that Mr. Kogis has to run. So, um, let me, hopefully, uh, if he's still there, put the question to him. Uh, we of course know that Germany is not alone in Europe. Uh, we have the EU and we have the EU ambition, uh, on climate action, and in fact, We want to in Europe, uh, reduce greenhouse gas emissions by 20-30 by 55%. I mean, that's the goal. Now, one of the vehicles, uh, for that is the program called Next Generation EU and the EU has already, or the commissioner has already announced that it will in part be financed by issuing European green bonds. Do you think that there is sufficient demand in the market? Oh, certainly, um, I mean, uh, if you look at the, uh, broader ESG goals, uh, the commission has already issued in the context of the SHR program which, um, is intended to finance short term work schemes, um, to improve qualification of socially underprivileged people, um, and, and it's used, um, social. bonds to finance that and the demand was um absolutely massive. So in that sense, I have absolutely no doubt that uh if uh we now see the issuance of about 30%, let's say, as is the goal, um, of the, uh, Next Generation EU volume in a green bond format, I'm absolutely sure that the market will be able to digest that. So, I think that's, uh, um, also coherent with the aim of the Next Generation EU program, which is. Um, even more than 30% green, so in that sense, um, I think all of the, um, all of the preconditions are there for an EU-wide green bond market to also develop, and that'll be another deepening because of course it'll give massive liquidity to the market, massive issuance, um, and of course the The Commission in the context of the own resources decision and its and its safety standards and guarantee standards will also be a very, very high quality and highly rated asset, so it'll be another example of very highly rated high quality green bots. Well, thank you very much, uh, and I know that you've got to run, so thank you very much for having been with us. Uh, and, uh, it's definitely a watch that space, uh, what's gonna happen, uh, with the European green bond. Uh, Jindong, um, there is one overruling question. Uh, thank you very much, Mr. Kois. There's the one overruling. Question, of course, um, they are being, um, everywhere, uh, national taxonomies are being developed. Um, uh, is there actually an advantage, uh, to harmonizing them? Do we need a global, uh, taxonomy, or is it OK if, uh, certain areas have certain taxonomies? So Connie, um, this is a very important question. And, uh, of course, uh, it would be great and, and, and one day we should have a global green standard that applies to, to, to everything we do. Uh, a global standard will bring, uh, The capital market and investors together, uh, with a level of transparency, disclosure, trustworthiness, that, that is, uh, that is, uh, uh, beneficial to everyone. However, until we get there, I think it is, it is practical and important that we first develop a national taxonomy that fits with the stage of socio-economic development and the stage of capital market development in a particular jurisdiction. As a pathway to an eventual global standard, uh, to make sure that taxonomy or standard becoming an innate becomes an enabling factor rather than the bottleneck for us to move towards eventual goal of a global standard. So I think, uh, you know, a, a global taxonomy would have to be developed. And, and, and we should start right now. But at the moment, uh, you know, we, we have to make sure that local conditions, uh, have to be considered. Otherwise, Because a global taxonomy disconnected from local reality may be coming instead of a enabling factor, it becomes a bottleneck so that it stymies the, the, the, the reason of green uh financing. So it could do more harm than good, although the intent is good. So setting up an unrealistic expectation would lead to issues not having an assets that meet them. And international investors will not be able to channel funds, uh, into the local market. So I think, yes, uh eventual global taxonomy with a high standard is where we should all strive for, but it has to take many steps, including a national level of taxonomy befitting with a local standard to create that enabling environment. Lovely. Thank you so much, uh, at this stage, and, uh, I know that you're interested in staying on. Uh, so, uh, a great invitation, uh, for you to be continuing to be with us. Um, and now, of course, we'll be opening our big panel for the rest of the session and share manyfold perspectives on these kind of core questions and It might actually transpire that there are 50 shades of green, or does the world really need this one single global green bond standard as we've just heard. So, um, let's, uh, have a quick look at how we plan to proceed. We have, uh, eminent panelists. They will look from the inside at country experiences. We look at China, Nigeria, Chile, and Colombia, and we'll have, uh, the views of two. Ladies from the investment industry, and then in the end, we have a European view on the principle of developing harmonized taxonomy. And for you, uh, the audience, of course, uh, and I've already seen that there was one question, uh, in the chat box, uh, to Mr. Kois. Thank you very much for that, but he did have to run off, but we'll see that you'll get an answer to that question. Uh, so you can actually, um, put your questions. Uh, in the chat box as before. And, uh, the last point is, uh, we've given, uh, each speaker a, uh, certain, um, allocation of time. And if you hear a funny ringing voice, then that's because their time is up. So, uh, that's for everybody to hear probably. And, uh, last but not least, you have the CVs because you had the invitation. Uh, I'm not gonna be too long on the explanation, who is. Sport. Now, let's start off with, uh, China, and China has been on the road to, uh, issuing green bonds for a number of years now and with a plethora of experiences, and today, there is an impetus for harmonizing, um, the situation within the borders of China. And there's also a cooperation going on on common standards of a green taxonomy with the EU. So, uh, absolutely fascinating and I'm very sure that, uh, Jun Ma can enlighten us. Uh, he personally has continually co-shaped the process, uh, with his peers in China. He is the chairman of China Green Finance Committee. He's founder and president of Beijing Institute of Finance and Sustainability, and last but not least, co-chair of G20 Sustainable Finance Working Group. And with that, Mr. Ma, we're eager to listen to you. Thank you very much, Connie. Can you hear me OK? Perfect. Great. Um, now, let me start with a few words on taxonomy in China. In fact, uh, uh, we have developed three sets of taxonomy already in the past, uh, 67 years. Um, the, uh, first taxonomy was, uh, um, on green lending, which was introduced by the, uh, banking regulator in 2007, 2013. And second taxonomy uh was on green bond. As Jingdong said, I was leading the drafting of this, uh, green bond taxonomy in 2015, and uh, the third one is called green um Iry Taxonomy, uh, that was led by the NDRC. And uh the industry taxonomy is now used as a basis for revising, uh, many of the taxonomies going forward. So internally, uh, we have some experience of developing taxonomy, and we have also a problems of having too many taxonomies. Uh, even within the bond market, uh, we used to have two taxonomies which are now being unified. Um, now the benefits of having taxonomies are quite obvious to us based on our experience. Number one, it's used to prevent greenwashing. You need to have taxonomy so that, uh, um, the, uh, green funds raised, uh, will be used for, um, you know, specific, uh, green activities rather than for any activities. You, uh, define. And secondly, the, uh, taxonomy is used to really measure performance, uh, for those financial institutions, um, they need to measure the, uh, green financial flows they generate, uh, in the form of green lending, green bonds, green funds, and so on. Uh, so the authorities can incentivize those with better performance on green flows. And also it's a basis for disclosure, uh, especially for disclosing green activities and the environmental benefits. And finally, it provides a basis for verification. Um, our green bound verifier, which I think is more than like uh 13 verifiers in China, uh, verifying, uh, the activities against the green bond taxonomy. Uh, so these are, are very important functions that, uh, which provided by taxonomy. And, uh, in terms of uh the issue of harmonization, I think, uh, uh, internally, uh, we need to harmonize, which is quite obvious with too many taxonomies that creates confusion, increase additional, uh, transaction costs and verification costs. Uh, that's why China has agreed to harmonize two sets of uh domestic green bound taxonomy, uh, which will be published very soon, uh, in, in one set, um, as a new green bond taxonomy. And internationally, um, I do have a view that we need to gradually harmonize our taxonomy. Back, uh, 5 years ago when we were discussing this issue at the G20 meeting, we were talking about the lack of taxonomy in many markets. But now, we're concerned about too many taxonomies. I heard that there are 200 taxonomies already globally, some, uh, produced by Country, some produced by market association, some by banks, some by corporates. Uh, again, that's creating a lot of transaction costs and confusion and, uh, uh, lead to a less transparency, uh, probably some risk of greenwashing. Uh, that's why harmonization is needed, but it may not be a very easy task. Uh, currently, we got a couple of, uh, platforms. which are working in that direction. One of them is the IPSF International Platform for Sustainable Finance. Uh, that was launched a couple of years ago by EU, uh, China, and a dozen other countries. And under the IPSF there is a working group on Sustainable Finance Taxonomy, that's co-chaired by China and the EU, and I'm the, uh, co-chair, uh, on the China side, um, working with, uh, Marcel Hag from uh DG FISMA. And this working group is aimed to produce a common ground taxonomy based on the Chinese taxonomy and the European system of finance taxonomy. And the common ground taxonomy first drafted, uh, is likely to come out in Q3 this year. Our initial thought is that the, um, those issuers and investors can choose to use a common ground taxonomy on a voluntary basis. For example, a Chinese issuer can use uh this taxonomy to issue green bonds in Europe. The European issuers can choose to use this taxonomy to issue a green panda bond in China. And also other markets can um do this on a voluntary basis as well. For example, I do hear some jurisdictions saying that uh, um, they may want to choose the common ground taxonomy produced by the IPS working group, uh, to be their taxonomy instead of producing their domestic taxonomy. Um, that's what I can see in the short term of how we use the more harmonized taxonomy. But in the longer term, I do see the need of gradually moving towards some set of, uh, some sort of a global harmonization. Um, which may not be easy as I know, uh, different countries will emphasize that the, the local conditions, priorities are different. But we may be able to build a framework of taxonomy with a few, uh, different layers or shades of greenness, um, as, uh, different versions of taxonomy. And the framework itself is consistent and different shades are compatible. Um, so that, uh, we can more easily understand the different shades of taxonomy across markets, um, and across countries. Back to you, Connie. Thank you very much. You were faster. My alarm clock is about, uh, to, uh, uh, stop now. You would have had another 30 seconds. So, fantastic, uh, on that. Uh, lovely, and, uh, I know that we're gonna pick up a couple of your issues and, uh, have them in, uh, the discussion later on. And, uh, one of the things, of course, that's very fascinating is how you try to align at least the thinking and a couple of issues, uh, between. This big, uh, market in China and the big market, uh, in Europe. So, thank you very much, uh, for drawing attention to that. And of course, ladies and gentlemen, we all know that financial markets are different. So we're happy to get to know about the situation in Nigeria, the country with the highest GDP in Africa. So, after the Paris climate agreements in 2015, Nigeria has decided to start developing its green bond infrastructure. Structure and Patience Oniha, both in her present position as Director General of the Debt Management Office in Nigeria and in her former role, is passionate about delivering solutions and results that propel institutions to higher levels of of achievement. And, uh, this time with developing green bonds, uh, it was actually tough going. Patience, could you just share your experience? Patience, are you very much. Ah, there you are. Wonderful. Uh, I am, yes. Uh, thank you very much for inviting me and thank you for organizing this. Just listening to the previous speakers, uh, I have learned, uh, quite a bit already. Um, I think you've given the good introduction already. So let me just say that, uh, uh, like you said, Nigeria has the largest GDP in Africa. Uh, but in addition to that, we have different, uh, geographical or climatic, uh, conditions. So we have deserts, we have swamp forests, and then we have the ocean, of course, on that side. So that makes us, um, a very good, uh, candidate for, uh, Uh, climate bonds or green bonds as we, as we call them. OK. So in our own case, we have, um, a fairly developed, uh, domestic uh debt markets where we have, uh, conventional securities from the short to the long end, you know, that are actively traded and the government is uh, uh, as expected, the major issue in that market. Uh, but, um, When um the government signed the agreement on the Paris Club, uh, agreement on climate change, we then considered it, uh, uh, useful to begin to ensure that uh the targets that the country had committed to achieve were achieved. So we then decided to introduce um, a green bond and we issued the first one in 2017. So, let me quickly add that, uh, the debt management office in Nigeria is really like charged with raising the funding, but the funding then goes to the different ministries and agencies of government who actually have those projects that are to be funded. So the point I'm making is that we have to work with the stakeholders, uh, involved, uh, in the utilization of the proceeds who own those projects that Qualify for green financing. We also, of course, worked with uh, uh, capital market operators and regulators, the Securities and Exchange Commission, and then the stock exchange. So, like I said, we already have an active market where there's two-way quote in, uh, in debt securities from the short to the long end. So this was, uh, A new thing and the first time in the Nigerian market. So in 2017, we, we issued our first green bond. Uh, compared to the other amounts I have heard, our amounts are rather small, but we issued about, uh, $26 million US dollars, uh, as if I may say, to test the market. It was for five years. Uh, I have to say two things about that experience. It was a learning experience for us. And but useful in the sense that we were pioneering something which the DMO has done over a number of years. We're pioneering something in the expectation that it will become a source of funding for government, but also other sectors of the economy will key into it because surely there are Green projects that can be financed by other tiers of government and the private sector. OK, so that was issued for a tenure of 5 years. Uh, it was rated, of course, by Moody's as, uh, excellent and was certified before we issued it. So we went through the process. Uh, the first thing I would say is that that process is lengthy. It is long and almost makes it, um, uh, a bit more expensive to issue a green bond than, um, a conventional bond. But again, like I said, it was, uh, was the experience and we were all, uh, the better for it. So in terms of subscription, we barely got that amount because we kept running with our other borrowings, which are much larger than this. We got the subscription of about 101%, and they were mainly institutional and the local as well. Uh, from that experience, we issued another one of fairly the same amount in 2018, meaning the other year, and that's the last one we issued. This time, we extended the tenure. It was, uh, 7 years. And um Again, the main investor, all the investors were local. Uh, but I think what was important in this other one is that we now actually saw some retail investors invest. So whereas the first time they were mainly institutions, the second time we had, uh, they were all institutions, I should say, we had retail investors participate. So that was, uh, another good, uh, experience for us. Uh, we haven't issued another one since then because obviously, you know, there are pre-issuance requirements and post-issuance requirements. So once we comply with all of that in terms of utilization, reports, and certification, we'll be ready to issue another one because we think there's a lot more awareness around it. I don't know if you wanted to talk about the taxonomy and all of that. I think, um, uh, we've used up, uh, the three-minute allocation and maybe we can actually sort of get to taxonomy, uh, when we actually have the, uh, discussion in a, in a moment. Um, I think what I've heard from you is that as opposed to the German experience where the state secretary talked about agreemium, uh, that was not the kind of sort of outlook, uh, that you experienced. Uh, at the moment. But, uh, thank you so much, uh, uh, for the moment. Uh, we'll get back to you in a moment because, uh, we're now gonna continue our travel around the world with, uh, early adopters and, uh, innovators of sovereign green bonds and setting up a taxonomy and return to South America. In fact, return to Chile and Colombia, one after the other, uh, that have not only cooperated with the World Bank in the process, but also, uh, compared notes with each other. So, at the beginning of this year, there was actually an international finance magazine that looked at Latin America and stated there is a definite love affair with ESG bond markets, uh, i.e., environmental, social, corporate governments, and they saw an unprecedented surge of issuances. Uh, in the area. So the question is, is this love affair, if it is one, does that also extend to sovereign green bonds and how difficult is it to really draw up a taxonomy? And, uh, the first person I'd like to ask, uh, is, uh, Andres Perez. He's the head of International Finance at the Ministry of Finance in Chile. So, what was your experience? Thanks a lot, Connie. So, um, thanks a lot for the opportunity to contribute in this panel. I mean, uh, it's, it's important for us to provide all perspective, uh, from Chile. At this point in time, uh, we believe we are an experienced issuer and we've been in the, we pioneered the, uh, green bond market in the Americas since 2019. So, first of all, I'd like just for some broad context, um, at the time that we were considering issuing green bonds in 2018, we had uh relevant financing needs and We also wanted to signal our commitment to climate action. So in addition to the fact that the Ministry of Finance is always looking at alternatives to diversify our investor base for the treasury bond market, and at the time, this is towards between 2016 and 2018, we had already made several adjustments in the direction of diversifying our investor base by allowing for non-residents just to participate in our local currency primary market operations, right? As a result, there was a natural step towards issuing green bonds. This was already towards 2018. Since our inaugural issuances in June of 2019, we have issued roughly $7.7 billion equivalent in green bonds, both in dollars and in euros. More to come there to see if we can further expand the currency mix of these green bond issuances. From our perspective, the main benefits have been not only the fact that they have allowed for us to demonstrate clear, concrete steps on climate action, but they've also come. At a financial gain in terms of a very low yields and again the diversification of our investor base, so we like to mention this that this is mostly about breaking with conventional wisdom, at least at the time, right? So you can, you can actually have both at the same time without a, without a financial cost. Um, in line with our green bond framework, which has since been adjusted, uh, towards a sustainable bond framework, uh, these issuances will contribute to the decarbonization of the Chilean economy mainly through the use of proceeds and clean transportation projects. Uh, in our experience, uh, especially in this aspect, what has been critical has been the collaboration and coordination. And other sectoral ministries, especially when it is with respect to the impact reporting, since we have started to publish our impact and allocation report last year. Since we issued our green bonds, we have further developed our framework, as I mentioned earlier, towards social and sustainable bonds, and we have issued quite rapidly. Currently, the thematic bond issuances, the outstanding stock, stands at roughly a little over 15%, which we believe is, is the largest in the region, and probably among the highest in the world. And where do we stand on taxonomy? I'm going to try to address both, both, both questions raised by, by Connie. Um, so our, our current green and and sustainable bond framework provides initial guidance towards sectors for the use of proceeds in line with international best practice. However, there is still plenty of work to be done, as is reflected by the nature of this event, and along these lines, the Ministry of Finance is, is working with CBI on, on guidelines that could lay the foundations towards a national taxonomy in Chile over time. And the result, the results of these reports are, are, are, is expected towards the end of this month. What's important also to say is that there is a coordination among. Among the in-market participants, especially among the regulators in the central bank towards, towards uh this effort, and the local financial market regulator has pointed towards the development of taxonomy as a relevant priority. So has the local pension fund regulator and the central bank. And, and, um, finally, uh, this also takes place in the context of other efforts that we have worked on at the ministry, such as incorporating green criteria and the measurement of fiscal spending. Please go ahead, uh, Connie. Thank you so much, Andre. I have a number of questions for you afterwards. And, uh, uh, thank you very much to everybody who's already putting, uh, questions into the chat. You might as well have a quick, uh, look at the chat. Uh, quite a number of issues, like, for example, um, uh, how do you actually, uh, get SDGs, uh, priced in. That will be answered, uh, afterwards because we now want to turn over and, uh, sort of, uh, Go over to, uh, your neighbor, Colombia. Um, Colombia has created a green framework with a green portfolio in the budget, um, and it's concentrated on developing the local green market, very important, uh, and one key word from, uh, my preparation call with, uh, Director of Public Credit and National Treasury, uh, Treasury Minister of Finance at CSA. Uh, Aras, uh, was the, the question was, um, is there is a big role of reforestation and the deforestation issues. So, um, that's, uh, probably one thing that you're going to touch upon. Now, I'd like, uh, to see that, uh, you, uh, Cesa, um, are online, and, uh, can you please start your three minutes now? Thank you very much Connie. Thank you to the German Ministry of Finance and to the World Bank. Germany was our inspiration to go into the local market as a priority, and the World Bank has been uh a crucial ally to the process of, of developing our framework and our taxonomy. I celebrate the, the, the title of this event because credibility was at the cornerstone of our ESG strategy in Colombia from the beginning. And to build that credibility and to guarantee that credibility, we structure our strategy in 5 pillars. I'm not going to go into a lot of details in the 5 pillars, but I want to mention them. The, the first one was institutionality. Uh, all last year when we started our strategy, we went to Congress to make sure. That there was an authorization to elaborate our green frameworks or our thematic frameworks and that that authorization was sort of centralized in the Ministry of Finance with the coordination of other line ministers and this is crucial because we wanted to make sure that there was legitimacy both in the parties of the opposition and government. To make sure there is support for systematic bond strategy and also because we didn't want this to be a one government strategy but a state policy and there is continuity by being written in the law, the second principle is that we want a strict adherence to our international commitments from the Paris Accord. And especially for investors, we will also be compliant with the with the green bond principles of the International Capital Market Association. Couple of numbers, uh, we made a pledge in 2018 to reduce our carbon emissions by 20%, and that pledge was increased recently directly by our president to 50% reduction by 2050 and to start introducing the notion of carbon neutrality by 2050. Um, the 3rd pillar of our strategy is that we went into a long process of building a green portfolio and a green framework along 6 big categories, and that framework and portfolio are gonna be certified. By a second party opinion provider that will give tranquility and guarantee to investors and regulators about the use of proceeds and the robustness of our framework. Some of the areas of that framework are common to other countries water management, clean transport, renewable energy, but some others are very focused on a particular situation in Colombia, which is one of the top 3 bio mega biodiverse countries in the world. For example, climate change adaptation, biodiversity protection, is sustainable, uh, agriculture. The fourth pillar is that we will prioritize the local market uh for different reasons. One, because we want this process of greening fiscal policy to be growing. We were a little bit disappointed in the in the volume of green projects that we had and we want to create incentives for fiscal policy to be greener and greener as we go for the private sector also as a reference points for business plans to be greener and for the local banks also for the loan portfolios to prioritize sustainability impact and finally. Our, we are developing our green Colombian taxonomy and I will just say a word about that it's a combination, it's a combination that will follow the standards of the EU in areas that are easy to standardize. There's no question about electric mobility, green buildings, and the so forth and so on, but we have very, we were gonna go deeper and very specific in idiosyncratic factors in Colombia like biodiversity, land use, reforestation, and sustainable agriculture. I will leave it up there, Connie. I'm happy to answer that. That's lovely. I said, we have. OK, I was just listening to myself to myself. I do see I do already there the ladies, ladies, so that we heard that there are a lot of, uh, uh, projects, projects, uh, for greed. the In 2050-020 and a significant amount of finance needs to be by the private so so being born promising promising to investments the work the work. two ladies that are, are part of that market that are investing, uh, they are really in it. Uh, the first lady that we're talking to is Lupe Raman. She's the executive vice director of the and portfolio manager at Ankle and, um, we have heard that Jindonghua has said green is an esoteric term. For many of us who work in finance. So my question to both ladies, uh, also to Claudia, what makes bonds green? What do you need from most foreign, uh, and sovereign issuers, and also the question is, uh, PIMCU has already developed its own taxonomy. So, could you please, uh, share your experience with us, uh, Lupin? I think that from an investor's perspective, it's very promising to hear that there is a recognition that a global approach to a common framework is important and is likely in the works. I think that this would really go a long way in terms of enhancing the growth of the green bond market and importantly for investors to avoid greenwashing. But currently, given that there are these various taxonomies under development, what investors like PIMCO have done is essentially form their own view and develop their own methodology as to what constitutes a green instrument and what is a green issuer. This is not as straightforward as it may seem because it requires both a sector and an asset class approach, so sectoral-wide frameworks, particularly in sectors that haven't been covered by the existing taxonomies, as well as the really Thinking very deeply as to how we should consider issuers that are issuing transition oriented financing or issuers that are on the spectrum of transition versus actually being in a brown sector. So all of these things factors have meant that we have found it very important to develop our own internal scanner for what we would consider as green instruments and green issuers, and essentially this has three pillars. We first look at the assessment of the use of proceeds, how they align with the latest technical. Screening criteria and whether the bond is broadly aligned with other core components of the EU Green Bond standard and the green bond principles. In addition to that, we go beyond the use of proceeds for that specific instrument and really assess the issuer's profile both in terms of the issuer's climate goals. And broader environmental and biodiversity targets. We think that that is important to ensure that issuers that are already best in class in terms of their e-environmental credentials but aren't necessarily issuing green instruments also get the credit in terms of how they approach financing for their budgetary needs. And then the third pillar is essentially looking for the absence of red flags in other aspects of sustainability and sustainable themes, and essentially this can be viewed as broadly aligning with the do no significant harm or the social safeguards principles. In the EU taxonomy, essentially we want to ensure, particularly in the sovereign and government space, that there are no red flag issuers that are looking to issue in this space, particularly if there are violations in other areas like human rights or modern slavery issues. So the challenge obviously with this approach beyond being very resource intensive is that there is a wide range for interpretation. And here I think the issues are much more relevant for emerging markets that are already looking to first of all manage a just transition as well as shift their energy mix from often very fossil fuel intensive energy. Sources into more greener, greener profiles, and I think that that challenge is something that has to be addressed in thinking about how a common global framework could be applied that takes both of these factors into consideration. Lovely, thank you thank you very much, and I think we are going to go back to the red flags in, uh, a moment when we are in, uh, the discussion, uh, with everybody else, uh, but now I'd like to turn from London. Uh, thank you very much, Lupin, uh, to Amsterdam, uh, but of course in some ways it doesn't really matter where the ladies are because of course they're looking at the global developments, challenges and offerings of the market. So, uh, a label is not enough. For engagement. Uh, that's what Claudia Cruz told me in our preparation call. So the question is, what is the managing director Global responsible Investment of APG Asset Management and her team looking for when turning to responsible investment? And, uh, are there different designated outcomes, sustainable, gender, COVID-19, uh, climate? Are they actually crowding each other out? Claudia, uh, you have the floor. Thank you very much. Um, so as APG we invest on behalf of uh Dutch pension funds. That's about 500 billion. So it's very, we're very much a long-term investor and our clients have set an ambition to and to contribute to the sustainable development goals of the UN. We call those sustainable development investments and for that we have developed a dedicated taxonomy and our reporting on them and also together with other, other asset owners have actually put this as a standard into the market. Our investments in green social and sustainable bonds are assessed in the context of this SDI, Sustainable Development Investment Taxonomy. So that's how we assess the greenness or, you know, yeah, the greenness or the sustainability profile of a bond. Or otherwise. And just as PIMCO, a label gives you some indication or a standard that is being followed, but it would never come in the place of doing our own analysis, doing our own research on what we really think of the bond in question. And for us, green bonds, social bonds, any bond. In terms of use of proceeds, we'll have to meet the same risk return requirements as other bonds, so we wouldn't give preference just because there's a green or sustainable label attached to it. We also, again, for us, the issuer profile really matters and whether the issuer strategy uh actually fits with the labeled issuance. Different labels exist, so we favor simplicity. So we would, for instance, rather see sustainability linked bonds. So those where it is linked to a tangible outcome and for example, to the coupon of a bond, we would prefer to see those being issued by industries that need to make it a transition rather than creating yet another category of transition bonds. Or last year we saw a lot of pandemic bonds being issued which we also invested in, but again, we think they can fall into the same category. So we currently have about $12 billion invested in labeled bonds and we definitely see tremendous growth here. But for us, while we think it's important to continue developing taxonomies and clarification, it will never, no, we will, it will never replace the most important aspect of it which we think is our own due diligence and also the engagement between issuers and investors. And Connie, I'll stop here. I think that's fantastic. Uh, you would have had another 20 seconds. Um, Michelle, thank you very much. Uh, the, the one quick question, uh, is, is there cannibalization? Between the different outcomes, designed outcomes. We wouldn't call it a cannibalization. I think we see a continuous evolution and now that you see sustainability linked bonds, they are also suitable to industries where otherwise the issuance of a green bond might have been considered controversial. So it's evolution, I think. Wonderful. Thank you so much, uh, for that. Uh, those were your additional 20 seconds, and, uh, what we've heard now, uh, ladies and gentlemen, was, of course, uh, um, in many ways, uh, we're talking about markets in transition. Uh, it's, it's, uh, on the path. It's not quite sort of, uh, uh, in stone, and, uh, that's probably the word transition. is probably the key word to introduce our last speaker on this panel, uh, Nathan Fabian, who is the chairperson of the European Platform on Sustainable Finance, uh, at the EU, and that's the body advising the EU Commission during the development of the, uh, EU taxonomy, and that's been mentioned a number of times already. Your group, Nathan, has just published a report on this transition challenge. The The EU is facing, uh, concretely, how the financial mechanisms can be employed to manage that transition. So, both, uh, questions I have for you are, first of all, can you share a little bit of that experience and also then say what you've heard other people are saying from your particular point of view. And, uh, up to you, uh, Nathan. Thank you, Connie, hello everyone. So the question, thank you. The question of transition is very important. Uh, because we recognize that our economies are not green enough today relative to the environmental goals we have, whether it's climate, uh, adaptation or mitigation, or biodiversity or other areas. And so clearly we're all transitioning. I think the insight we've had in the European work is that It's most helpful to the financial system if we set a performance benchmark that reflects, reflects what we need to achieve. And then there can be lots of ways to describe and use that benchmark. As we chart our progress and the transition of companies or economies or local governments, uh, and the changes they can make. And one of the pitfalls or risks is trying to pretend or assume to ourselves that every incremental improvement from where I am today is satisfactory in transition. And so we must distinguish the performance benchmark, which is what we've gone for in Europe. And find other ways to recognize progress towards the benchmark, such as recognizing capital expenditures and bond financing, which is designed to transform an asset to meet the performance criteria in the taxonomy over time, counting that as green finance, but recognizing that the asset won't be green until it arrives at the destination. And so therefore we need a few tools. We need the taxonomies, but we also need to separate this question of good intentions with corporate plans and strategies, for example, and targets. These, these good intentions need to be reported and disclosed, but let's not confuse them with performance. And that's what the taxonomies can most help with. So that's the first point. I've probably got about 1 minute and a half, I'm guessing, Connie. So the key, some of the other key issues spot on. So there were 4 elements to the framework for taxonomy in Europe that we think provides a good basis for harmonization. So some explicit environmental goals, a list of economic activities, some metrics to measure performance, and then performance criteria, whether they're qualitative, process-based, or quantitative. With these four elements, it's possible to have different taxonomies that can be compared compared to each other in a transparent way. So if I have a different biodiversity objective in Colombia to my biodiversity objective in Nigeria, as long as I can clearly explain how that goal is different but I have all the other elements of the framework the same, the market can understand. So this provides a basis for harmonization and then we can work on the, making the, uh, the metrics performance criteria the same over time if we need to. So that's, it's really important that we don't overload this question of harmonization. Frameworks can get us there. The other question I think is worth reflecting on, especially when we're talking about emerging markets, is what's the benefits of trying to standardize and follow international approaches versus the benefits of trying to have something different and local. And clearly referring to the comments of Ma Jun, if we're going for confidence on greenwashing, if we're going for tracking ease, we're going for verification, we're going for reduction of transaction costs, and standardization has benefits. And so this can support international capital flows. Where you would have your own, uh, stand own standard of taxonomy is where you needed to recognize some specific, uh, industry that is different to other people's industries or some environmental objective which is different to other countries' objectives, but otherwise, the benefits of trying to set an investment standard in a global capital market, the benefit of that falls away quite quickly. And so I'd refer back to the comment on try and use a similar framework, even where there are different goals that you want to refer to, because that's the best way to understand, uh, how markets, uh, how the taxonomies can link and support the growth of taxonomy approach globally. Thanks, Connie. Well, thank you so much and uh thanks to all panelists who have stuck to the time uh ascribed. Um, I'm, I'm in awe of you actually having put very complex uh ideas into 3 minutes. Uh, so we now have, um, let's say a quarter of an hour, um, maybe 20 minutes. So, um, we have a number of Questions. And I actually think, um, the, the last one that we just got in, what is the panelists' view on transition taxonomy? Is it justified for some countries to ensure that companies operating in brown industries who are actively working towards decarbonization are not excluded from investment mandates? And, um, I'm just gonna change the layout so that I can actually see everybody's, uh, faces. Um, I, I think, um, that would be definitely in the first place, uh, be something for, uh, Claudia and Lupin, but then, of course, uh, for the country. So maybe just a Lupin, maybe a very brief, uh, answer on that. Sure, I mean, I think that um for, for us a taxonomy would help in terms of clearly defining what sectors and what types of targets would fulfill the transition criteria, but ultimately we actually believe, and I agree. With Claudia on this, that the SDG linked approach is a much more cleaner way to really assess the overall activities at the issuer level and provide both the carrot and stick along the life of the instrument to ensure that that transition is actually met. Thank you, thank you, uh, and, and quick question, anybody else, uh, I see, uh, Chile and Colombia. I see their faces. Claudia, maybe you start and then, uh, we'll switch over, yeah, and I've already seen Andres. Yeah, yeah, we are actually going to issue guidance on sustainability linked bonds quite soon, and, you know, we are, we believe that they are well suited to address transition challenges. Particularly for companies that do not have sufficient capital for use of proceeds kind of bonds and sectors with business models where these use of proceeds bonds might be seen as controversial, so this instrument should be prioritized in our view, for example, carbon intensive sectors. So we do see a role there and rather than calling it transition bonds. OK, again, it's, it's a question of, you know, what word do you use, uh, if it's, if it's the correct thing that's inside, then it's not only a question of wording, it's also, um. You know, it, it's, it's not, it's just not semantics, you know, it should really clearly signal transition objectives on the sustainability linked bonds to, you know, we, we like it with it's linked to a coupon. It's also about how you structure it. Thank you for that clarification. Um, I, I saw Andres, uh, uh, with a hand up. Yeah, thank you. Thank you, Connie. So, uh, it's a very important question, especially for, for Chile, as you may know, uh, mining is a very important, uh, sector in terms of its contribution to economic activity, employment, and, and investment. Um, what we've seen thus far is that, uh, more than, uh, an actual taxonomy for trans. bonds. What we, we have seen a lot of interest in terms of investors has been more of the strategies and concrete steps that these, that these different mining firms may take towards reducing their, their overall environmental footprint. And in that sense that builds on the credibility issue that was mentioned by my, by my Colombian colleague Cesar. Thanks. Uh, Cesar, do you, do you want to comment on that as well, or? You would have the opportunity to just briefly my, my, my, my preference would be to dedicate green taxonomies for green sectors and not mixing. Brown sectors into a green taxonomy for that I fully agree with the panelists that you have SDG loan uh link bonds and you have transition bonds and you even have conventional bonds. I think that this is a great opportunity to be truly green in the taxonomy and to measure greenness through those definitions. Lovely. Thank you so much, uh, uh, Majun. Could you please, uh, switch on your camera? Uh, yeah, now I can read your face in the true sense of the word because I can actually see it. Uh, there was a question directed, uh, specifically to you, and I just have to, uh, read it out. You mentioned that China is planning to Issue two sets of green taxonomy in the coming months. Could you please elaborate a bit more on these two new standards and how they differentiate from existing standards in China? Especially, it would be rather interesting whether clean coal will be still included in these new standards. I was referring to the unification of two green bond standards within China into one. And uh that's likely to be issued very soon. And the new green bond taxonomy uh unified taxonomy which we issued in 2015 under the PBOC and the other taxonomy also for green bonds issued by NDRC but it's for a very small number of green bonds. So, uh, we are now unifying. And the New green bond taxonomy will remove clean coal technology as an item. Um, it's a clear indication that the, uh, China, uh, is now placing carbon neutrality, uh, at the, uh, priority of the environmental and, uh, green development agenda. Uh, previously, the clinical technology was included in all the green bound taxonomy partly because, uh, 67 years ago, air pollution was a major issue. Uh, it was a priority in the environmental policy, and, uh, some technologies were able to reduce air pollution such as the KOOs and socks, but unable to reduce carbon, and that technology was included about 67 years ago. Uh, but now situation has, um, you know, been quite different. Air pollution has come down so much and the carbon neutrality, uh, has become much more prominent. Thank you so much. Uh, could I encourage patience, uh, if she's still there, uh, to switch on her camera so that I can actually know that I can address her. Uh, we just saw somebody, uh, from a technical staff to, um, sort of fill in for her. Patience, uh, that's the technical staff. Is Patience there? No, uh, patience, patience is has to leave for something for an urgent call from the minister actually, so she said I should stand by to, you know, finish the part of the discussion. OK, so, um, uh, thank you very much. Uh, so, is, is there anything that you would like to add? You've, you've been listening, uh, so you're not the state technical stuff, of course. Sorry, sorry, terribly sorry, um, my misunderstanding, uh, and it still says, of course, patience on uh, uh, on your screen, um, so. So, um, what's, what's the, um, take, uh, in Nigeria on, uh, what you actually count as green? Uh, we've heard, uh, from your boss that she said, uh, it's been a hell of a lot of hard work and it's a question of, uh, communicating the right things to the investors. Yes. Uh, basically, like, um, you know, I discussed with her before she left, actually. Um, You know, talking about uh what we've done so far and then, uh, you know, linking with uh the taxonomy we're talking about actually, we have been uh working very hard to ensure that, uh, you know, at the national level, we actually spelt out this taxonomy. So we are more of, uh, you know, we developed the national taxonomy before, you know, adopting, you know, the national, you know, one that, that is to take, you know, based on the discussion I had with her before she left. Uh, that's lovely. Thank you very much. Um, uh, Nathan, would you like to chip in, uh, and maybe I also, I mean, if you want to have one comment on, um, sort of the discussion past, but, um, I think there is a question that's sort of more designed, uh, for you. For those countries developing taxonomies, how are they using the taxonomy, uh, taxonomy development to ensure alignment of financial flows to Paris targets or SDGs? Uh, thanks, Connie. So the idea is to set a performance criteria that reflects whatever environmental goal or objective has been adopted by the country. So it's possible to set a criteria for net zero in 2030 if you want, but if it happens to be 2060, then obviously you'll have different performance expectations for transport versus buildings, versus agriculture. But as long as that is, uh, transparent, then the market can work out exactly what you're doing. It can make its own judgment. Uh, I guess what we're hoping is that Uh, countries will see this as an opportunity to attract finance to the next round of industrial performance and upgrading. There's not much value in just trying to attract finance to what you're already doing, because you're gonna have to refit it all in 5 or 10 years to, to get it on your, on your pathway to your, your NDC. So see it as a chance to set a target for the future, attract the next round of financing to future economic performance, and make sure it's in a pathway consistent with the environmental goal you've got over several decades. Uh, thank you so much. Um, uh, Jindong, uh, I know that you're still there. If you want to get involved, uh, this would be the time, uh, to do so because that question was, of course, uh, also in, uh, the direction, uh, to what you have pointed out in your, uh, initial remarks, uh, that SDGs and climate need to sort of, uh, be both priced in if we want to allocate, uh, finances, if we want to allocate bonds in the right direction. Absolutely. Let me just take one example, Food loss and waste. It's actually the 3rd largest carbon emitter after energy and transport. It wastes about 20% of fresh water in agriculture. So I think SDG's climate change intertwined. So, so while we focus on addressing every aspect of climate change, the broader development issue is an integral part of the, the overall solution. So that's really what I wanted to, to highlight. Thank you so much. Um, I, uh, Jun Ma, could you just sort of, uh, get back on? It's just that, um, for, for this, uh, Q&A, it's always better to have all of you, uh, in view in the, in the true sense of the word, um. The first question might have been, but I'm still putting it out, are green activities enough for a taxonomy, uh, or should it be outcomes-based to allow tracking of the contribution of green bonds with climate or other environmental global goals? Uh, maybe, Andres, um, you might be, uh, and, uh, um, uh, Majun, um, Majun first, and then Andres. I think in order to uh ensure the credibility of the market, uh, taxonomy is only one necessary condition. Uh, it's not the uh uh sufficient conditions. What we need, uh, uh, in addition to taxonomy is the uh verification process, uh, making sure that, uh, the, uh, uh, the instruments or the bonds issued are indeed greening according to the taxonomy. Uh, that's why the verifiers have come in. And in fact, in China, we also had a problem of Uh, some verifiers may not be qualified, and that's why we need to verify the verify, uh, making sure that they deliver quality verification. Um, and then the other aspect is, uh, the, uh, disclosure. Disclosure has to, uh, become increasingly mandatory. Uh, without disclosure, even if you have taxonomy, even if you have uh verification in the beginning of issuance, it may not be green, um, in the, in the rest of the, uh, uh, the project lifetime. Uh, that's why these are three critical components of a credibility, uh, a market of credibility. Um, and of course, uh, um, to, uh, ensure the, uh, consistency with the carbon neutrality of Paris Agreement, the, uh, taxonomy itself needs to evolve. Uh, for example, as I mentioned earlier, we're removing clinical technology from taxonomy, it's one step. And uh going forward, I think we need to enhance the green building standards. Previously, maybe you know 30% reduction of energy consumption uh is considered a green building. Going forward, maybe we need to move it to 40%, 50%, and eventually, uh, net zero building. And uh, uh, the, uh, energy saving technologies, um, sometime you save only 10% in the electronic, uh, electronic appliance, and that's considered green. Uh, that's the old standard. In the future, when we are moving closer to carbon neutrality, they need to be a much more stringent than, than before. Uh, thank you so much. I was gonna give the word, uh, to, uh, Andres, uh, and keep your answer in mind just for a second. All I wanted to do is, uh, on the road saying that, uh, um, Farah, we have, uh, had the issue of, uh, clean coal already, so, uh, I'm not gonna put that again. So, Andres, um, the answer to the, um, question on, uh, activities. Sure, thanks. So, um, I mean, Yeah, I'll be brief, uh, again, in the interest of time, um, I think it's important to, uh, as this discussion on the global standard continues, I think it's important as an issuer for us, uh, to enhance reporting and the other activities that are relevant for investors. So in that context, what we have done, at least in, in, in the Ministry of Finance of Chile is strengthen, for example, all of the relationship building. With, with investors that is through roadshows, presentations, reports, frequently answered questions, interviews, and showing concrete results and credible results, right? So and again this also builds on the fact that we must maintain or build on international best practice and certification criteria which is also mentioned by Majun. And also finally, maybe it's also important to build a knowledge, knowledge building and capacity building in the local market. Taxonomy tends to generate different kinds of feelings depending on who you talk to and also in different sectors. So it's important to level expectations and understand what do we mean by the development of this of this concept. Thanks. Thank you so much. I believe, uh, one of the two investor ladies, uh, mentioned the fact that, of course, you do have, uh, countries at different stage of development and you do have actually countries that are still, uh, very, uh, brown invested. Um, how would you, um, advise them, uh, to proceed, uh, in, uh, attracting the right investments? And this is now sort of, you know, taking off your hat and saying this is what we go for loop in loop in. Yes, uh, I think that it really depends on a country by country basis. Um, so for example, in some, uh, emerging markets we're seeing quite a Important renewable energy push. So a country like Egypt which did issue a green bond and has quite a solid medium term target in terms of increasing clean energy, is one where we can actually be very supportive as long as they are following and meeting their targets. Other countries like Indonesia where you have a greater reliance on We would need to see a much more firmer commitment to reducing that energy reliance on coal in the medium term. So I think it's a matter of how a sovereign manages to enhance its credibility, which is a point that we heard earlier in the panel from the Colombian perspective, and I think that that is really important for investors, not so. Much where the starting point is, but whether there is a firm commitment for that transition because I think one thing that we are seeing in this space is you may have very ring-fenced green project, but if your overall commitment in terms of shifting your energy mix is not ambitious or even moving in the right direction, then there is an element. Of apprehension with which investors are going to view those types of instruments, spin that question the question with the added element, uh, of say, uh, for you as, as investors, uh, are you looking primarily to sovereign bonds, or would you say corporate bonds are actually quite easier because we don't have so many variables. So we invest in both corporate and sovereign bonds and uh and so, so therefore it's not an either or. What we do see right now that is that there's a tremendous growth potential in sovereigns and they in turn, that in turn the growth there would help accelerate the growth in more corporate issuances we would expect and like with corporate issuers, we also really value the dialogue with governments and um. Already very, very much like the, the, the comment of from, from Chile, from Mr. Perez on actively reaching out and we had for example a dialogue with the Mexican government on how to structure and the impact framework and there I think uh that dialogue can help advance issuances that are also investable for us. Great. Thank you very much. I mean, I could go on, uh, forever, but you all have a limited amount of time and, uh, I have the feeling that Nathan needs to run off. So, uh, the, uh, he's gonna be, Nathan, are you still there? Um, I think we have just lost him, uh, because you said thank you, uh, in the chat. So, um, the last round, I actually want to sort of look at, not at 2050, I don't want to look at 2060. I really want to look at 2030 because that's the next, uh, uh, stepping. Stone basically and also one of you has said in preparation, if we don't see companies or states moving in the right direction already now, they're never going to get two goals by 2030 and therefore never going to achieve it by 2050. So I would like you to continue the sentence, in 2030, green bonds and taxonomy is or are, however you want to put it. And um maybe, as I said, Nathan has just uh left us, so, uh, let's kick off uh with Cesar, who hasn't been able to say something in the last couple of minutes. I just want to make one point which I think is important. Sovereigns are different than corporates and banks. We have a very powerful tool to really make a transition faster in green issues, which is politics. So in my view in the future, the analysis of investors and regulators is gonna be more comprehensive than only earmarking resources for a particular water project in Colombia I think. There will be recognition and structures that will recognize ex ante policies. For example, we created a market in which we put a 10% threshold mandatory for renewable energy in supply and demand. That is very transformational, but I cannot earmarking that budget and also exposed with the issue of the popularity and I think transparency that provides uh indicators linked bonds. Lovely. Thank you very much. Um, I'd like to, uh, switch over to Nigeria and could we just have a sort of a more or less a sound bite like sort of in 2030, green bonds in Nigeria are In, in 20 by 2030, green bonds in Nigeria are basically beyond, you know, the domestic issuance of green bond that we've started. We're thinking going international and basically, we've started the corporate of, uh, you know, hedding. You know, we want to make sure that the TEP economy nationally is, uh, you know, very sound, you know, and, you know, 4G 3G definitely will key in with uh whatever is the international it's gonna be and uh you know, there will be a lot of uh you know green bond uh. Projects Thank you very much, uh, for that, and, uh, Majun. As if you're asking, uh, my expectation for Chinese green bond market, I think in the next 9 years, we're gonna see probably 10, 20-fold increase in the size of the green bond market here. Just this year, partly because of the declaration of carbon neutrality target, we're already seeing 100% year on year growth in the first quarter of this year. And I expect this momentum to continue, uh, very rapidly. The second feature I would expect is that uh the green bond market will become much more open. Uh, than before, um, as, uh, uh, we are creating special channel for, uh, green assets to, uh, trade across, uh, the border, and, uh, also, uh, we'll make efforts to, uh, enhance the, uh, um, the, uh, uh, um, transparency of the, uh, local bond market, including by making more English information available for the Chinese bonds. Thank you so much, uh, and keep up the good work. I know that you're working at it and that you're corresponding, uh, with Europe quite a bit, uh, so maybe, uh, you tell Fabian, uh, in a moment, uh, Nathan in a moment, uh, what's been happening. Uh, Andres. Thank you. So I'll be very brief. You asked for a sort of a sort of a short statement. So it's like, where do we see green bonds in 2030? I think they'll continue to play a fundamental role in Chile's financing strategy and also continue to play a role in the decarbonization process of the Chilean economy more broadly. Lovely. Thank you very much. With that, we have the countries, uh, now the investor ladies, and then Jingdong. Um, and this time I'm gonna start with Claudia. But, but, uh, what I believe you'll be seeing, we will be seeing much stronger accountability mechanisms which will become the norm for both corporate and sovereign sovereign issuances. Thank you for the brevity of that statement. And I think in 202,030 the green bond market will have been tried and tested to some of the concerns that many investors and issuers have and will become a much more significant part of investor portfolios than it is currently. That's wonderful. Thank you very much. So, uh, first of all, hopefully we have achieved all the SDG goals, but by 2030, I am confident and, and it still needs a lot of effort that the size of the green bond market. can more than fill the gap needed to make a dramatic change in, in, in the climate trajectory uh that uh fits with our global ambition. Another point I wanted to say is that hopefully by then, there is a single global taxonomy or global standard. Um, uh, as a, as a, not only a goal, but, but, uh, you know, very much trusted. Aided by something that nobody has mentioned so far. That is, rapid advancement of technology. So geotagging, through satellite imaging, uh, uh, that the disclosure of grain becomes technologically very technologically very enabled to solve one piece of the puzzle. While each of these, as uh Doctor Majin said, is uh not a sufficient condition, but added together, hopefully, we will have A sufficient condition to accomplish this ambitious but uh mass-delivered goal of uh of uh making a difference in achieving uh carbon neutral, uh, in hopefully by uh a global commitment by Glasgow uh later this year. Thank you very much, uh, for that final word, uh, in the last statements that we've heard. Uh, I, I would like to thank each and every one of you, uh, ladies and gentlemen of the panelists, uh, for sticking to the time and, uh, for sharing your views with us. Uh, we know that we are already 15 minutes over time, but we still have some Finishing a word, some last remarks. Um, our thanks goes over to you. If you want to, you can switch off your cameras now because I'd now like to introduce Nikolai Putscher, the alternate uh uh executive Director for Germany at the World Bank Group with his, uh, last outlook, uh, for this session. Nikolai. Well, thank you very much, Connie, and, um, thank you very much for, for all the participants and, um, the presenter. It, it was really a very rich and to my acknowledgment, a very timely discussion. I found it, uh, extremely helpful. But first of all, I would like to thank Carla Marell Calderon from IT, Gunther Bager, our ID Sier Heuser, Philip Hauger, Jana Kto, and Steffi Herb from the German office for their great support. And we also thank our bank colleagues, Haiker Reichel, Farah Hussain, and James Stewart for their guidance along the way. And a great thank you to Sophie Mendert from the German Ministry of Finance. Um, I would highlight the following points from our discussion. Um, if I hear panelists speak about the importance of taxonomy, um, I, I found it very helpful to better understand now that taxonomy is only 11 cornerstone of the overall process and that we have to look into verification, disclosure, and in particular, transparency to build trust and credibility for the product and the market. Um, I think that is really a very wide angle and, and a very helpful one. Also, the aspect of to, to develop this taxonomy with, with scientific evidence and country requirements is also, I guess, a very helpful aspect. Um, and the issue of benefits for the issuer and the investor, um, and how that will develop and play out for the future development of the market. What I found interesting is this kind of Different aspect of, on the one side, to look at impact and the transition aspect, which I guess is really a measurement problem, uh, in a, in a very strong sense against like taxonomy, verification, disclosure, where you can have more easily described quantitative, um, aspects. So I'm, I'm really looking forward how this discussion will play out in the future. Um, Finally, 2030 and your remarks, I found them really helpful. Um, so, it gives me the, the impression that we are on the wrong, on, on the right way for the future, for the development. Um, and, um, in particular, the aspect of having either a global standard on a very broad sense like ICMA and others who are more broadly drafted and, and more open, and I found the aspects from Nathan with the, with the 4. Um, elements, uh, quite a stimulating idea to go forward, um, but that we really have to see how that works out. Um, my personal opinion is rather a little bit that we will have more taxonomies perhaps for the near future for countries and for sectors. So it may make sense to have a taxonomy for energy, for transport, for agriculture, for research and innovation. and others. So to have a more broader comparison from energy, green bonds from one country with another country, and, and, in that regard to develop the market by reducing transaction costs and, and build credibility and trust. With that, thank you again very much. It was a rich discussion. I, I learned a lot, if I, uh, I have to, to say. And back to you, Connie. Well, I think, uh, the interest is still there, um, despite the fact that we are a little bit over time, we still have, uh, half of the participants, uh, that were already, um, uh, signed in there right at the beginning. So thank you very much, ladies and gentlemen, for keeping up your interest. There are a couple of questions in the chat, uh, especially about, uh, the German solution, let me call it with the twinning. Uh, that might be answered, uh, to each and every one of you who was interested in finding out about that. And all I can say is, Nikolai, um, this was the second part, and of course, uh, me being a journalist, I would say, you know, the second part of the trilogy, uh, there's a question mark. So, uh, the conversation definitely continues. Um, a big thank, uh, You to all of the participants, but also, uh, also to the team that prepared, uh, and helped with everything, to everybody who donated their time in advance, uh, of, uh, this discussion. Uh, we hope that, uh, you will play out, um, whatever, uh, form, shape, or manner taxonomy in your country. Um, will take, um, uh, however, um, many green bonds are being issued, uh, it's time, it's going above the 4% line. We still need to shift the trillions, and let's always remember why we do all that. It's not just, um, to have a, uh, mental exercise, uh, but it is in order to get our act in order. And really by 2050, have a greenhouse gas, a carbon neutral Earth, um, all around. So with that, um, it's a sign off from my little studio and, uh, back to Washington. Uh, Nikolai and everybody whoever has, uh, participated, thank you very much. I think the conversation will continue. Till then, bye-bye. Definitely. Thank you very much, Connie. Bye-bye to everyone.

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Targeting Green Bonds - 2021 Spring Meetings Event

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