The Inter-American Development Bank (IDB) has officially announced the creation of the Green Bond Transparency Platform (GBTP), an initiative supported by the Luxembourg Green Exchange (LGX).
The announcement was made at the UN Climate Change Conference (COP25) in Madrid on Wednesday. LGX, which was present at the launch ceremony, expressed its support for the innovative digital tool aimed at bringing greater transparency to the Latin American and Caribbean green bond market.
Julie Becker, Member of the Executive Committee of the Luxembourg Stock Exchange (LuxSE) and Founder of LGX, commented: "LGX is proud to have been chosen by IDB as a partner to establish this innovative and extremely useful platform for the benefit of green bond investors worldwide. Green bonds play a crucial role in financing sustainable development projects, in Latin America and beyond, and cross-border collaboration is key". She added: “For the green bond market to keep growing, investors need access to transparent data, and reliable and verifiable reporting on the impact of green projects. This platform can make a difference in the Latin American market, and this is why we support it".
The GBTP uses Blockchain (DLT) technology and is the first such tool to facilitate harmonised issuance reporting and verification. Issuers, investors and other market players can use the platform to share and research information on transaction details, bond performance and use of proceeds and gain a detailed understanding of the environmental impacts of the region’s green bond issues. In this way, the platform aims to provide investors with relevant and consistent information on which to base their investment decisions. In parallel, the platform will give visibility to issuers of green investment projects and facilitate the disclosure and reporting process.
The platform is currently in its beta stage and set for official launch in 2020. Given its focus on transparency and comparability of data, it is expected to provide a greater level of confidence to current market participants and remove an important deterrent for the entrance of new market players requiring greater transparency and comparability than what is currently available in the market. The GBTP could become a model for green bond markets in other regions and is supported by more than 30 public and private organisations worldwide, including LGX.