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In an era where sustainability is not just a buzzword but a business imperative, Malta has marked a significant milestone with the issuance of its first green bond. This pioneering move not only reflects the market’s early steps in the commitment to sustainable development. It is a signal that there are new financing avenues for companies looking to contribute to a greener future. But how does a company in Malta issue a green bond? This article provides a simple guide, outlining the main steps and key considerations for companies who are interested in raising capital for environmentally friendly purposes.
The journey begins with ensuring that your company's internal processes and procedures align with the United Nations' minimal safeguards. This alignment is crucial for establishing a foundation of trust and credibility, which is essential in the green bond market.
Next, it's time to identify potential green projects. These projects should not only contribute positively to the environment but also be financially viable. The feasibility of these projects is key, as they will ultimately be responsible for the repayment of the bond.
A critical step in this process is the establishment of a Green Bond Framework. This involves setting up a project evaluation and selection process, along with a robust reporting framework. Effective management of the proceeds is also a part of this framework, ensuring that all funds raised are channelled towards its intended green purpose.
With the framework in place, the company must appoint an accredited green bond verifier. This verifier, listed on the MSE website, conducts due diligence on the company's Green Bond Framework, ensuring compliance with relevant regulations and systematic transparency built in to the processes.
Issuing a green bond also involves adhering to the normal listing rules in Malta. This means appointing a corporate advisor, legal counsel, and a broker. Furthermore, the company must undergo a financial due diligence process, which is then submitted to the MFSA.
An often-overlooked but one of the final steps is the transition from a limited company to a public limited company. This transition is necessary for the issuance of a green bond and requires careful planning and execution.
Issuing a green bond in Malta is more than just a financial exercise; it's a commitment to long term sustainable development and value creation. While the process involves several steps and adherence to regulatory requirements, the end result is not just a successful financial venture but a significant contribution to our community. The journey doesn't end with the raising of funds. The real challenge, and indeed the ongoing commitment, lies in maintaining the integrity of the 'green' label. In fact the steps don’t stop once the funds are raised, but the company must continue to be worthy of being on the green list by communicating openly with the public through reports, and upholding the processes and procedures. It's a journey of accountability and continuous improvement.
If you're a trailblazer in the realm of environmental innovation, don't hesitate to connect with our team. We're not just financiers; we're collaborators, dedicated to propelling your green initiatives forward. Let's join forces, ignite change, and pave the way for a future where ecological responsibility meets unparalleled success.
Francesca is a Senior Manager at Grant Thornton, specialising in economic advisory and sustainability services. With nine years of experience at the firm, including a two-year placement in the Dublin office, her expertise spans a wide range of sustainability and economic research areas. Currently, her focus is on assisting clients with preparing for CSRD reporting requirements, supporting them in navigating the fast-changing regulatory landscape and setting up internal processes which provide transparency and accountability, enhancing stakeholder confidence
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