DEC 15

CPR is pleased to invite you to a talk on Judicial Reputation: A Comparative Theory Tuesday, 15 December 2015, 11:30 a.m. – 1:00 p.m.

Deputy Dean and Leo Spitz Professor of International Law, University of Chicago Law School

Conference Hall, Centre for Policy Research

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Judges are society’s elders and experts, our masters and mediators. We depend on them to dispense justice with integrity, deliberation, and efficiency. Yet judges, as Alexander Hamilton famously noted, lack the power of the purse or the sword. They must rely almost entirely on their reputations to secure compliance with their decisions, obtain resources, and maintain their political influence. In Judicial Reputation, Nuno Garoupa and Tom Ginsburg explain how reputation is not only an essential quality of the judiciary as a whole, but also of individual judges. Perceptions of judicial systems around the world range from widespread admiration to utter contempt, and as judges participate within these institutions some earn respect, while others are scorned. Judicial Reputation explores how judges respond to the reputational incentives provided by the different audiences they interact with—lawyers, politicians, the media, and the public itself—and how institutional structures mediate these interactions. The judicial structure is best understood not through the lens of legal culture or tradition, but through the economics of judiciary information and reputation. Transcending those conventional lenses, Garoupa and Ginsburg employ their long-standing research on the latter to examine the fascinating effects that governmental interactions, multicourt systems, extrajudicial work, and the international rule-of-law movement have had on the reputations of judges in this era.

• Naresh Kumar Sagar
• December 4, 2015

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DECEMBER 4, 2015 |EDIT

Naresh Kumar Sagar

Just now ·

SEBI releases concept paper for issuance of Green Bonds
A green bond is like any other bond where a debt instrument is issued by an entity for raising funds from investors. However what differentiates a Green bond from other bonds is that the proceeds of a Green Bond offering are ‘ear-marked’ for use towards financing ‘green’ projects. Thus the key difference between a ‘green’ bond and a regular bond is that the issuer publicly states it is raising capital to fund ‘green’ projects, assets or business activities with an environmental benefit, such as renewable energy, low carbon transport etc. However, as of now there is no standard definition of green bonds and the one that is being currently used is based on market practice.

SEBI has released a concept paper for issuance of Green Bonds and have invited suggestions on their proposal. The snapshot of the concept paper is as under.

Need for Green Bonds: Infrastructure financing in India has traditionally been supported by the institutions such as banks, NBFCs and Financial Institutions. However, given the huge investment requirements in infrastructure space, it is widely accepted that current project financing sources may not be sufficient for capacity addition. Thus, there is a need to introduce new means of financing and innovative financial instruments that can leverage a wider investor base such as pension funds, sovereign wealth funds, insurance companies, etc. that can invest in the infrastructure sector. Corporate bond markets have long been considered towards providing this much required alternate source of financing

Benefits of issuing Green Bonds

Positive public Relations: Green bonds can help in enhancing an issuer’s reputation, as this is an effective way for an issuer to demonstrate its green credentials. It displays the issuers commitment towards the development and sustainability of the environment. Further, this may also generate some positive publicity for the issuer.

Investor Diversification: There are specific global pool of capital, which are earmarked towards investment in Green Ventures. This source of capital focuses primarily on environmental, social and governance (ESG) related aspects of the projects in which they intend to invest. Thus, green bonds provide an issuer the access to such investors which they otherwise may not be able to tap with a regular bond.

Potential for pricing advantage: The green bond issuance attracts wider investor base and this may in turn benefit the issuers in terms of better pricing of their bonds vis-a-vis a regular bond. Currently there is very limited evidence available in this regard, however as demand of green bonds increases it is likely to drive increasingly favorable terms and a better price for the issuer. Further, with increasing focus of the global investor community towards green investments, it is expected that new set of investors will enter into this space leading to lowering the cost of funding for green projects.

International Experience: Issuance of green bonds started in year 2007 and in the initial years Green Bonds were a niche product, pioneered by a handful of development banks. The period between 2007-2012 was featured with the issuance of green bonds by the Supranational organizations such as the European Investment Bank and the World Bank, along with few governments etc. However, with growing market appetite for such bonds there is increasing diversification of issuers and investors participating in Green Bonds. Year 2013 saw the participation from corporate sector, which substantially increased in year 2014. This has lead to overall growth in the fresh issuance of green bonds, where the market has almost tripled in size between 2013 and 2014, with around US$37 billion issued in 2014.

Proposal

Issuance of Green Bonds in India does not require any amendment to the existing SEBI regulations for issuance of corporate bonds, SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (hereinafter “ILDS Regulations”). The issue, listing and disclosure requirements as prescribed under ILDS Regulations will continue to be applicable, like any regular corporate bond issuance. However, for designating an issue of corporate bonds as green bonds, in addition to the compliance with the requirements under ILDS Regulations, an issuer shall have to disclose in the offer document following additional information about the green bonds, which have been based upon the Green Bond Principles, 2015:

Use of proceeds: Issuer shall define and disclose in their offer document, the criteria for identification as ‘green’ i.e. what projects, assets or activities will be considered ‘eligible for financing’ and quantum of funds to be spent on the projects/assets/activities.

For assigning the status of the bonds as Green, the broad categories of areas where such monies may be invested may be one or more of the following:

• Renewable and sustainable energy (wind, solar etc.)
• Clean transportation (mass transportation)
• Sustainable water management (clean and/or drinking water, water recycling etc)
• Climate change adaptation
• Energy efficiency (efficient and green buildings)
• Sustainable waste management (recycling, waste to energy etc.)
• Sustainable land use (including sustainable forestry and agriculture, afforestation etc.)
• Biodiversity conservation

However, it is to be noted that this is an indicative list and may include other categories as specified by Board. Further, an issuer, if proposes to utilise a proportion of the proceeds of the issue of Green Bonds, towards refinancing of existing green assets, it shall be clearly provided in the offer document and wherever possible, shall also provide the details of the portfolio/assets/projects which are identified for such refinancing.

Project evaluation and selection: The issuer of a Green Bond shall provide the details of decision-making process, it will/has followed for determining the eligibility of projects for using Green Bond proceeds. An indicative guideline of the details to be provided is as under:
• process followed/ to be followed for determining how the project(s) fit within the eligible Green Projects categories;
• the criteria, making the projects eligible for using the Green Bond proceeds; and
• environmental sustainability objectives.

Management of proceeds: The proceeds of Green Bonds shall be credited to an escrow account, and shall be utilised only for the stated purpose, as in the offer document. The use of proceeds shall be tracked as per an approved internal policy of issuer and such policy shall be disclosed in the offer document/placement memorandum. The utilisation of the proceeds may also be verified/supplemented by the report of an external auditor, or other third party, to verify the internal tracking method and the allocation of funds towards the projects, from the Green Bond proceeds.

Reporting: In addition to reporting on the use of proceeds issuers shall also provide, at least on an annual basis, a list of projects to which Green Bond proceeds have been allocated. This may also include the details of the expected environmental impact of such projects. The environmental impact report may provide for qualitative performance indicators and, where possible, quantitative performance measures of the expected environmental sustainability impact of the specific project. However, where confidentiality agreements or competition issues limit the amount of detail that can be made available, information can be presented in generic terms.