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Sustainability

Market Closed 10-23-2019 00:08 AM GMT -03:00


 Green and Social Bonds

What is the Green and Social Bonds market on Santiago Exchange?

The Green and Social Bonds Segment is an initiative aligned with the strategy for developing sustainability within Santiago Exchange, which has already implemented various initiatives related to this area in recent years. This has included the creation of the Dow Jones Sustainability Chile Index (DJSI Chile) in 2015, the development of Santiago Exchange’s Integrated Annual and Sustainability Report (2016), and the publication of its Guide to Responsible Investment (2017). Moreover, this represents a contribution to Chile’s efforts to address climate change, which include the development of a local capital market for issuing Green and Social Bonds.

The initiative also aims to provide the market with a new form of financing that provides issuers, investors and stakeholders in general with the opportunity to directly contribute to the main goal set forth in both the Kyoto Protocol (2005) and the Paris Agreement (2020) of mitigating the effects of global warming. It also addresses the principles of the United Nations Global Compact, which is related to the support that companies should provide in applying precautionary criteria to environmental problems, while also adopting initiatives to promote greater environmental and social responsibility.

Specifically, the Green and Social Bonds Segment will allow fixed-income instruments classified as a green and/or social bond to be issued. These instruments can then be traded using the same systems that Santiago Exchange provides for trading debt instruments.

Download the Green and Social Bonds Segment Guide here​​​​​​​​​

Definition of Green Bonds

According to the "Green Bond Principles,” these are any type of bond instrument where the proceeds will be exclusively applied to partially or fully financing or re-financing new or existing projects that can be defined as "Green Projects" and which reflect the four principles.

The World Wildlife Foundation (WWF) has stated that “only a bond for which the issuer can demonstrate measurable environmental benefits, certified by an independent party according to such widely-accepted, fully developed standards, should qualify as a green bond.” Additionally, the Climate Bonds Initiative defines Labeled Green Bonds as those "bonds where the use of resources is set aside in order to finance new projects and re-finance existing projects, with environmental benefits." Finally, the World Bank defines a green bond as "debt securities that are issued to generate capital specifically to support environmental projects or those related to climate change."

Definition of Social Bonds

According to the, these Social Bond Principles are "any type of bond instrument where the proceeds will be exclusively applied to finance or re-finance in part or in full new and/or existing eligible Social Projects and which are aligned with the four core components of the SBP.

Project Categories

The project categories accepted as green by both Santiago Exchange and Third-Party Verifiers must be detailed in the Green Bond Principles, the Social Bond Principles or defined and developed by the Climate Bond Initiative, as available on their respective websites.

International Standards Recognized by Santiago Exchange


                


Third-Party Verifiers

A Third-Party Verifier is a consulting firm whose main objective is to check that the issuer complies with the provisions of the Green Bond Principles, the Social Bond Principles, or both, when applicable.

The Third-Party Verifier provides a final opinion to the issuer through a report requested in Spanish; the issuer may also request that the institution provides a copy in English. The issuer will then provide this document to Santiago Exchange to support the bond issuance. The Third-Party Verifier must be among the institutions approved by the Climate Bond Initiative.

In order to contribute to the development of this market segment in Chile and incorporate internationally-recognized best practices, Santiago Exchange has established a set of recommendations to be included in the report issued by a Third-Party Verifier both prior and subsequent to the issuance of a green and/or social bond.

Minimum Content for a Third-Party Verifier Report can be downloaded here​​​​​​​​​ ​​​​​​

 

Frequently Asked Questions


  • What is the composition of the exchange’s Board of Directors?

    Santiago Exchange’s Board of Directors is currently composed of eleven members, which together elect a Chairman. The law specifically states that the board must be made up of at least five members, who may or may not be shareholders, and must hold elections annually, where members may be reelected. 

  • What information should I submit to apply for dual listing on Santiago Exchange, Venture?

    Companies listed on TSXV must send an application letter requesting the dual listing (see attached documents) and send it to the Santiago Exchange for registration. 

  • According to the law, what are the objectives of the exchange?

    According to article 38 of the Securities Market Law, stock exchanges are organizations that aim to provide their members with the necessary infrastructure to effectively carry out securities transactions through continuous public auction and to perform other intermediation services in accordance with the law. 

  • Which companies can access the Venture Market?

    Any issuer from TSXV can access the dual listing with Santiago Exchange, Venture. 

  • What is Santiago Exchange?

    Santiago Exchange is an exchange whose primary role is to provide buyers and sellers of securities a physical meeting place for them to trade through services provided by brokers. Santiago Exchange is a public company composed of 48 shares, and its operation is overseen by the Chilean Securities and Insurance Supervisor. 

  • What benefits does the Venture Market of Santiago Exchange offer venture capital companies?

    Santiago Exchange, Venture enables companies at an exploration stage to access a greater number of investors through its regional presence given by the participation of Santiago Exchange in MILA. In addition, Santiago Exchange, Venture has the support of the leading platform for financing mining companies at an exploration stage (TSXV), being a relevant factor for both companies and investors, to have the validation of such exchange. 

  • Where does Santiago Exchange operate?

    The exchange operates in a historical building in downtown Santiago, at the intersection of Bandera Street, the Union Club and Nueva York and La Bolsa streets. Its address is La Bolsa 64, Santiago. 

  • What are the benefits of listing the instruments in Chilean pesos?

    The values that are listed and traded in Chilean pesos on the Foreign Securities Market of Santiago Exchange will be cleared and settled in CCLV Central Counterparty, reducing counterparty risk of such operations. 

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