Green Bonds Supporting Green Buildings Financing

Since the establishment of the Taiwan green bond market in 2017, the total amount of green bonds listed on the Taipei Exchange has reached TWD 282.3 billion to date. Approximately 15% of the funds (TWD 42.3 billion) have been allocated to green building projects, marking a significant increase from 7% in 2021. This trend indicates a growing number of issuers are using green bonds to raise funds for green building projects.

Green bonds are an effective tool for financing investment projects that have a positive impact on the environment. Green buildings are eligible for green bond financing since they help mitigate climate change by reducing energy consumption and carbon emissions. Issuers can adhere to international financial market guidelines or standards, such as the Green Bond Principles (GBP) issued by the International Capital Market Association (ICMA), to establish selection criteria for investing in green buildings. The GBP specifies that buildings with a significant positive impact on the environment should meet regional, national, or internationally recognized green building standards or certifications. Additionally, the Green Bond Database Methodology published by the Climate Bonds Initiative (CBI) defines eligible green buildings for green bond funding as those that have achieved a certain level of green building certification, such as LEED Gold or BREEAM Excellent.

In December 2022, the competent authorities introduced the Taiwan Sustainable Taxonomy, which outlines technical screening standards for economic activities related to new or renovated green buildings in Taiwan. Economic activities that meet the EEWH Silver or higher and a BERS Label level of 2 or higher are recognized as having a significant positive impact on mitigating climate change. Hence, domestic issuers with green building projects can utilize these guidelines as evaluation and screening criteria to classify their projects as eligible green investment projects and raise funds through green bonds. Furthermore, green buildings that meet the relevant requirements may also receive bonus volume incentives.