If an oil company borrows money to cut emissions, is that green finance? That isn’t a rhetorical question. The answer is yes. Even if they are not in traditionally 'green' sectors like wind farm engineering or energy-efficient building construction, companies are increasingly able to raise green finance very cheaply, compared to regular debt.
Earlier this month, US Steel (US:X) raised over $60m (£45m) in a green bond issuance. In November, fellow steelmaker Mitsubishi Heavy Industries sold $240m in green bonds to finance its renewables projects. Outside the commodities space, Tritax Big Box REIT (BBOX) raised £250m, with a coupon of 1.5 per cent. The REIT’s other bonds have coupons ranging from 2.6 to 3.1 per cent.
These aren’t huge amounts but many companies are dipping a toe into the space, even as questions grow over how green bonds are monitored and whether heavy polluters should have access.