The Climate Bonds Initiative (Climate Bonds), is an international NGO that seeks to “mobilize global capital for climate action”. What that means in practice is 1) Reporting on the evolution of the global market for green bonds; 2) Producing standards and certification schemes for bonds that raise funds for investments in the low-carbon economy; and 3) Developing policy proposals for governments, finance, and industry.

Most recently, Climate Bonds came to prominence in Japan as the certifying authority for the Japanese government’s first issuance of “Climate Transition Bonds” (also known as GX Bonds). The framework applied to the GX Bond is said to be a world- first. And while some are skeptical about the Japanese government’s efforts, Sean Kidney, the CEO of the Climate Bonds Initiative, sat down with Japan NRG in Tokyo to explain why he believes in the GX issuance.

There was a lot of caution and skepticism about the Japanese government creating a new kind of bond, as opposed to a “green bond”. Is the GX Bond entirely new? And if so, is it still valid to address climate change?

To be very clear, this is a climate transition bond to finance Japan’s green transformation program (GX). It’s a green bond, it walks and talks and smells like a green bond. It goes in a green bond portfolio, there’s no difference. Except that the nature of the investments it’s focused on is how to support an industrial transition. It’s industrial planning. We haven’t seen industrial planning bonds before. That’s useful. And we think………