From Stanford to Oberlin, Schools Rush to Tap the ESG Bond Market Financial PostFrom Stanford to Oberlin, Schools Rush to Tap the ESG Bond Market Financial PostFrom Stanford to Oberlin, Schools Rush to Tap the ESG Bond Market Financial Post
Impact Investing Forum 2023
London. Dec 05-06, 2023.
(Bloomberg) — Eager to show their commitment to mitigate climate change, U.S. colleges are touting their efforts in the bond market with a trendy financing tool.Schools last year floated almost four times as much debt branded with green, sustainability or social labels as the year before, taking advantage of the hunger from investors who want securities that signal their own interest in the environment.Perennial builders and repairers of their mini cities, colleges are funding projects that will reduce their carbon footprint — such as by converting a century-old energy system at Oberlin College. They are also helping to reduce future emissions by expanding research space, and a track to test electric car charging at Utah State University. Common projects on campuses include new buildings that meet greener standards than older buildings. In 2021, municipal borrowers sold more than $50 billion of green-, social- or sustainability-labeled debt, far and away a record, according to data compiled by Bloomberg. According to Bloomberg data, $1.7 billion was sold by colleges and universities. This is a record. Green bonds don’t need to be verified. Issuers can claim the label and hope that investors will have faith in them. Kauffman stated that while it may seem small now, the benefit will increase over time as the ESG investor base matures. It may not be a significant benefit now, but it will become more important in the future. Green-labeled municipal bonds have been used to fund mass transit projects and clean water initiatives. The standards and disclosure associated with such debt are inconsistent so not all projects are labeled as “green” and not every project is labeled as such. In the $4 trillion municipal-bond market, green-labeled bonds have funded mass-transit projects and clean water initiatives. The $80.6 million green bond was priced at a yield of 90 basis points higher than the benchmark. The spread for the $30.4 million series to refinance debt was 95 basis points. The $30.4 million series, which was used to refinance debt, was priced at a spread of 95 basis points. Story continues below. This advertisement has not loaded yet, but your article continues below. Continue the story below. The advertisement has not loaded yet. Your article continues below. “It’s going be the new normal,” said Melissa Winkler. Utah State used a different verifier to support its research to reduce carbon emissions. Its debt funds the expansion of a building that will be used to research car-charging systems at highway speeds. Dave Cowley, vice-president for business and finance, stated that Oberlin’s multiyear energy conversion will help it reach its goal of becoming carbon neutral by 2025. At events with prospective students, President Carmen Twillie Ambar lauds the effort, saying that although construction can be difficult, it will improve the campus. “I say you’re going have to step on the sustainable infrastructure project,” she stated. “It’s going to be here for four years.”(c)2022 Bloomberg L.P.Bloomberg.comStory continues belowThis advertisement has not loaded yet, but your article continues below.