Opportunities and Challenges for Green Bonds in Germany

To be able to achieve the objectives of the Paris Climate Agreement, investments in low-emission and resilient development must be consistently increased. In this context, green bonds play an increasingly important role. While more and more actors worldwide are entering the green bond market, and global green bond issuance volume almost doubled from 2015 to 2016, a rather 'wait-and-see' attitude is prevalent in Germany. Both on the supply side and on the demand side, experts see various hurdles for the further growth of the green bond market, such as the lack of binding standards for project selection, impact measurement and reporting on green bonds, as well as high transaction costs for green bond emissions.

Against this background, the Association of German Public Banks (VÖB) has initiated the Green Bond Initiative Germany. The initiative includes an expert dialogue with stakeholders from the German market for green bonds. adelphi supported the VÖB in the preparation and implementation of the workshop. The discussion focused on the opportunities and challenges faced by various market participants (issuers, investors, direct and indirect providers) for (even more active) participation in the green bond market and their contribution to the long-term growth of the segment. A central aspect of the workshop was therefore the tension between "quality and quantity of green bonds". In addition, the project team from adelphi went into greater depth on the results of the workshop in a subsequent study and formulated recommendations for the long-term growth of the market for green bonds in Germany.