The CarbonCount™ methodology, which became a FiRe winner in April 2015, is now fully operational, having been used to certify the greenhouse gas emissions reductions of a $118 million “green” bond offering completed on September 30, 2015 by Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE: HASI).
CarbonCount™ is a metric developed by the Alliance to Save Energy that quantifies the impact of bond investments in U.S.-based energy-efficiency and renewable-energy projects given the expected reduction in carbon dioxide (CO2) emissions resulting from each $1,000 of investment. Hannon Armstrong’s green bond offering, for example, earned a CarbonCount™ of 0.39 metric tons of CO2 emissions reduced annually per $1,000 of investment.
Kateri Callahan, Alliance to Save Energy President and FiRe Champion, issued a statement marking the occasion:
“The market for green bonds will never grow beyond niche status until emissions impacts are correlated with financial returns. To this end, investors have been urging green bond issuers and underwriters to develop aligned, fact-based and public impact assessments. Issuers and underwriters have the best access to the needed data, but little incentive to burden their issuance process with added costs until buyers make impact assessments a condition of purchase, or award better prices for the incremental effort required to provide the additional information content.
“The Alliance designed CarbonCount™ to sustain and accelerate the growth of the green bond market by providing investors, underwriters and issuers a single, comparable metric. Combining project data already used for credit ratings, sophisticated publically available emissions modeling software and clearly documented analytical assumptions, CarbonCount™ produces a quantitative score that is credible without being administratively or financially burdensome.
“Once adopted at scale, CarbonCount™ offers the potential to protect the green bond market from stagnating or even imploding due to misrepresentation of emissions impacts. The tool can empower interested investors to direct funds so that they can have the greatest per dollar impact on the most critical environmental issue—climate change. CarbonCount™ offers a basis for comparing emissions reduction benefits across all clean energy technologies. Over time, the Alliance hopes that investors will insist on seeing an emissions assessment before purchasing a bond, just as they currently require a credit assessment.”