Expert Voices: New York City Comptroller Scott M. Stringer – New York City Needs Green Bonds Now
With over 8.4 million residents packed alongside 520 miles of shoreline, New York City has a compelling need to focus on resiliency. Indeed, as the largest city in the United States, New York typically spends $8 to 10 billion each year on capital projects, including environmentally-beneficial infrastructure. Bonds play a critical role in financing these projects.
With growing global demand for socially-conscious investments, my office has put forth an ambitious Green Bond Program that would fund qualified projects as part of our ongoing debt sales. The program would expand the City’s investor base and shine a spotlight on the City’s important environmental initiatives to encourage greater support and investment. When fully built-out, our program could be the largest municipal vehicle in the nation to fund environmentally-friendly projects.
Our proposal for New York City’s Green Bond Program was developed in two stages.
First, we looked at the City’s capital program and internal financial, budget and reporting systems to determine if existing projects and management systems would support a sustained, high-quality green bond program. After extensive internal review and consultation with several Green Bond Principles participants, we concluded that a New York City Green Bond Program would not only be feasible, but would in fact provide real benefits to the people of New York City and the broader green bond market as a whole. As a result, we issued a report detailing our proposal in September 2014.
In the months after the report was released, we vetted our proposal with key external constituencies – investors, securities firms and environmental advocates – and presented to the C40 Sustainable Infrastructure Finance Network. We explored these stakeholders’ needs and assessed best practices for a New York City Green Bonds Program. These discussions resulted in a report update issued in April of this year, which presents our findings, provides a snapshot of the maturing municipal green bond market, and highlights the strong support and encouragement investors provided for our vision for a high-quality green bond program.
Since the release of the initial report, global growth in municipal green bond issues has been particularly striking – in fact, such municipal issuers represent the fastest growing sector in the green bond market. However, there is still more work to be done, as tax-exempt U.S. municipals still occupy only a small piece of the total green bond marketplace. As one of the largest municipal issuers in the country, New York City’s program would help catalyze the emerging municipal green bond market through the visibility, liquidity and reputation of our bonds.
A green bond program is more than a label on an offering document. Investors demand strict accountability in project selection and expenditures.
I believe our vision for a high-quality green bond program would help the City while helping the municipal green bond market grow, opening up a new type of capital investment with environmental benefits for big cities and small towns across the country and around the world. It is my hope that, in cooperation with the Mayor’s office, my partner in New York City debt issuance, we will undertake this critical program. We look forward to continuing to work with C40, to share our experiences with other cities, and to learn from the green bond aspirations of other global megacities.
To read the original Green Bonds Report, click here.
To read the Green Bonds Report Update, click here.
To view the NYC Comptroller’s Investor Relations website, click here.