Green Bond Demand Coming from Tenants, J.P. Morgan Chase Says

Marilyn Ceci, managing director and head of green bonds at J.P. Morgan Chase & Co., participated in a video interview at Nareit’s ESG Forum 2019 at the Hyatt Regency Coconut Point in Bonita Springs, Florida.

Ceci described the rise in green bond issuance as a “natural evolution.” She noted that momentum and demand is coming from the tenant side, particularly in Europe.

Green bonds provide REITs, or any issuer, an opportunity to communicate their sustainability strategy and attract a wider investor pool, Ceci said.

When considering issuing green bonds, REITs need to follow the green bond principles, which is a set of voluntary best practice guidelines, Ceci explained. The principles cover the use of proceeds, the selection process for what goes into the green bond, management of the proceeds, and reporting procedures.

“Investors want to know what you do with the money and what was the impact,” Ceci said.

As for the future of the REIT green bond market, Ceci noted that there are currently 59 global real estate issuers in the green bond market—seven of those are U.S. REITs and three have issued more than one green bond.

Ceci said she expects corporate peer pressure could help advance green bond issuance.