Fossil lending

Net green/fossil bond syndication league tables

Written by Ulf Erlandsson

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This technical note calculates normalised bond syndication fee revenue league tables based on netting green bond compared with fossil bond issuances. Based on subscriber feedback, this note complements our recent article “The Box – algorithmic climate impact in FI markets”, by providing additional league tables as a basis for a potential counterparty selection mechanism.

In the initial setting, we provided league tables based on fossil fee revenues only, not accounting for potential green revenue generation on the other side. Arguably, it is different for a bank to have 10% fossil fee revenues, when the remainder (90%) is green, compared with if there are no green efforts at all. In order to gauge this, this note considers the net fossil (green bonds minus fossil bonds) syndication fees as a percentage of total syndication fees.

The tables we present in this article are based on a mix between estimated and actual data and with a number of selection criteria in order to define the universe of eligible bonds. Fossil bonds are defined by a number of BICS level 2 codes available in the original paper. Due to certain imprecision in BICS segmentation, the fossil revenue generation may be underestimated.

About the author

Ulf Erlandsson

Ulf Erlandsson

Founder, Board member

Dr Ulf Erlandsson founded the Anthropocene Fixed Income Institute and was its first CEO. A pioneer of climate-focused fixed income portfolio management, he was named Environmental Finance’s Bond Personality of the Year 2022.

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