Prize-winning Methodology for Evaluating CO2 Benefits of “Green” Investments Applied to Hannon Armstrong’s Latest Bond Offering

A Statement from Alliance to Save Energy President Kateri Callahan

“The Alliance to Save Energy is proud to announce that its innovative CarbonCount® methodology is now fully operational, having been used to certify the carbon reductions of a $118.6 million “green” bond offering completed today by Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE: HASI). With this step, CarbonCount transitions from a heralded concept to a real-world tool that provides investors with a quantitative measure of projected carbon impacts for each investment dollar. Only five months after earning a prestigious Finance for Resilience (FiRe) award at the 2015 Bloomberg New Energy Finance Future of Energy Summit, CarbonCount is making good on its promise to equip bond market participants with actionable information in a user-friendly format, enabling them to assess the carbon profile of securities in the same fashion and at the same time as they evaluate credit risk and other financial metrics.

“The market for green bonds will never grow beyond niche status until carbon quantities are transformed into 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 value-adding information to investors, underwriters and issuers. 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 carbon 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. Importantly, CarbonCount offers a basis for comparing carbon reduction benefits across all clean energy technologies. Over time, the Alliance hopes that investors will insist on seeing a carbon assessment before purchasing a bond, just as they currently require a credit assessment.”