WEBVTT 00:00:02.120 --> 00:00:05.400 Germany has embarked on a journey towards a low-carbon, 00:00:05.400 --> 00:00:09.760 more resource-efficient and sustainable economy. 00:00:10.160 --> 00:00:13.160 At a global level, Germany is fully committed to 00:00:13.160 --> 00:00:16.960 the Paris Climate Agreement and to the achievement of the 00:00:16.960 --> 00:00:20.880 17 United Nations Sustainable Development Goals. 00:00:21.360 --> 00:00:26.720 Germany dedicates important budgetary resources to the achievement of these goals. 00:00:27.040 --> 00:00:30.400 With the German 2050 Climate Action Plan 00:00:30.400 --> 00:00:32.400 and Climate Protection Act, 00:00:32.400 --> 00:00:35.560 the Federal Government has set an important course. 00:00:36.000 --> 00:00:38.920 The transformation of the energy system in Germany 00:00:38.920 --> 00:00:42.680 has already been initiated at the beginning of the millennium. 00:00:42.840 --> 00:00:46.400 The German industry is on its way into a post-fossil 00:00:46.400 --> 00:00:48.320 and post-nuclear age. 00:00:48.760 --> 00:00:51.960 The switch to electromobility is progressing. 00:00:52.360 --> 00:00:56.040 Urban districts are increasingly built in a sustainable 00:00:56.040 --> 00:00:57.960 and resource-efficient manner. 00:00:58.440 --> 00:01:04.440 Sustainable agricultural enterprises and practices are also developing fast. 00:01:04.760 --> 00:01:08.880 Finance will be a key to mobilize and channel more investments 00:01:08.880 --> 00:01:13.120 towards the development of a more environmentally friendly economy. 00:01:13.720 --> 00:01:16.680 Part of the German Sustainability Strategy 00:01:16.680 --> 00:01:19.760 is the issuance of Green Federal Securities, 00:01:19.760 --> 00:01:23.040 aiming to promote transparency and sustainability 00:01:23.040 --> 00:01:26.200 in the financial industry‘s decision-making process 00:01:26.200 --> 00:01:30.480 and to establish a green Bund curve as interest rate reference 00:01:30.480 --> 00:01:32.560 for the Euro green finance market. 00:01:33.280 --> 00:01:38.320 Germany issues Green Federal securities, starting in 2020. 00:01:38.320 --> 00:01:41.000 To get more information on these bonds, 00:01:41.000 --> 00:01:45.520 please feel free to have a look at the movie “The Twin Bond Concept". 00:01:46.080 --> 00:01:48.760 The associated Green Bond Framework 00:01:48.760 --> 00:01:51.960 was published at the end of August 2020. 00:01:52.280 --> 00:01:57.280 It – in particular – articulates clearly, for which potential purpose 00:01:57.280 --> 00:02:01.360 the proceeds of the Green German Federal securities may serve. 00:02:02.080 --> 00:02:04.800 Since Green Bunds are Sovereign bonds, 00:02:04.800 --> 00:02:09.320 the use of proceeds of course corresponds to positions in the Federal budget. 00:02:09.760 --> 00:02:13.760 Furthermore, the Framework specifies that the expenditure 00:02:13.760 --> 00:02:18.440 must always stem from the financial year preceding the year of issuance 00:02:18.600 --> 00:02:21.760 and must actually already have been paid out. 00:02:22.240 --> 00:02:24.120 Green eligible expenditure 00:02:24.120 --> 00:02:26.720 can include any type of Federal expenditure 00:02:26.720 --> 00:02:29.920 contributing to a transition towards a low-carbon, 00:02:29.920 --> 00:02:33.280 resource-efficient and sustainable economy. 00:02:33.680 --> 00:02:34.840 This includes: 00:02:35.000 --> 00:02:37.760 Expenditure related to real assets 00:02:37.760 --> 00:02:40.240 such as infrastructure and buildings, 00:02:40.240 --> 00:02:42.880 as well as landscapes and forests. 00:02:43.200 --> 00:02:46.320 Expenditure related to intangible assets, 00:02:46.320 --> 00:02:48.960 such as talent and organizations, 00:02:48.960 --> 00:02:51.160 research and innovation 00:02:51.160 --> 00:02:52.680 and scientific knowledge. 00:02:53.120 --> 00:02:56.160 Responsible for the selection of expenditure items 00:02:56.160 --> 00:02:58.640 is an interministerial working group, 00:02:58.640 --> 00:03:01.640 consisting of 8 different federal ministries. 00:03:02.080 --> 00:03:05.160 Let’s have a closer look at the Green Bond Framework, 00:03:05.160 --> 00:03:08.800 which provides for the following categories of expenditures 00:03:08.800 --> 00:03:12.120 for allocating the proceeds of Green Federal securities. 00:03:12.800 --> 00:03:16.520 Expenditures in the Federal budget for transport and traffic. 00:03:16.920 --> 00:03:19.160 These are for example expenditures 00:03:19.160 --> 00:03:21.440 for federal rail infrastructure, 00:03:21.440 --> 00:03:26.480 support for the development of electric mobility or bicycle infrastructure. 00:03:26.920 --> 00:03:30.160 Expenditures in connection with international cooperation 00:03:30.160 --> 00:03:35.320 relating to environmental, climate and nature conservation projects. 00:03:35.600 --> 00:03:39.040 For example bilateral technical and financial support 00:03:39.040 --> 00:03:41.000 of green projects around the world, 00:03:41.320 --> 00:03:47.200 contributions to international funds, as well as bi- and multilateral partnerships. 00:03:47.600 --> 00:03:52.160 Expenditures for research, innovation and awareness building. 00:03:52.360 --> 00:03:55.960 This means mainly research on renewable energies 00:03:55.960 --> 00:03:58.800 and energy storage, climate change, 00:03:58.800 --> 00:04:06.200 biodiversity, nature protection, environment, coasts, oceans and polar areas. 00:04:06.440 --> 00:04:09.640 Expenditures in the field of energy and industry. 00:04:10.080 --> 00:04:13.840 Those are for example applied research on renewables, 00:04:13.840 --> 00:04:16.960 measures to increase sustainable heating and cooling, 00:04:16.960 --> 00:04:21.240 energy transition, and energy efficiency in buildings. 00:04:21.600 --> 00:04:27.840 Expenditures of agriculture, forestry, landscape protection and biodiversity. 00:04:28.280 --> 00:04:31.360 This includes expenditures for low-carbon farming 00:04:31.360 --> 00:04:33.440 and organic farming practices, 00:04:33.440 --> 00:04:36.960 forest protection or the management of extreme weather events. 00:04:37.480 --> 00:04:42.560 A major part of the Green Bund proceeds is allocated to transport expenditure. 00:04:42.800 --> 00:04:46.960 For example, it may take the form of subsidies to Deutsche Bahn 00:04:46.960 --> 00:04:50.640 in order to maintain a high-quality rail network. 00:04:51.160 --> 00:04:54.120 Already today, every ICE ride 00:04:54.120 --> 00:04:56.600 that replaces a longer lasting car trip 00:04:56.600 --> 00:04:59.800 means a significant reduction in CO2 emissions. 00:05:00.000 --> 00:05:02.400 The same applies to every truck load 00:05:02.400 --> 00:05:05.480 that is shifted to a freight train in the future. 00:05:05.920 --> 00:05:08.640 Switching traffic from road to rail 00:05:08.640 --> 00:05:13.200 leads to a considerable relief for the climate and environment. 00:05:13.440 --> 00:05:15.880 Quite simply because of the higher efficiency 00:05:15.880 --> 00:05:19.800 and lower per unit consumption of electricity and fuel. 00:05:20.160 --> 00:05:21.800 Against this background, 00:05:21.800 --> 00:05:25.840 expenditure in the Federal budget for the transport and traffic sector, 00:05:26.000 --> 00:05:30.720 which is mainly invested in the expansion and maintenance of the rail network, 00:05:31.040 --> 00:05:33.600 will represent a considerable proportion 00:05:33.600 --> 00:05:37.360 of spending on Green Federal Securities for years to come. 00:05:37.760 --> 00:05:40.160 Expenditure on international cooperation 00:05:40.160 --> 00:05:44.400 in connection with climate protection and environmental projects 00:05:44.400 --> 00:05:49.320 also plays an important role as a basis for Green Federal Securities. 00:05:49.320 --> 00:05:54.120 The German Agency for International Cooperation, or GIZ for short, 00:05:54.120 --> 00:05:57.880 is a service provider that supports the German Government 00:05:57.880 --> 00:06:02.320 in the sector of international cooperation for sustainable development. 00:06:02.480 --> 00:06:06.560 In the past years, GIZ has already accompanied 00:06:06.560 --> 00:06:10.120 more than 1500 projects of environmental, 00:06:10.120 --> 00:06:14.080 climate and nature conservation in 120 countries. 00:06:14.400 --> 00:06:16.920 These projects have been directly financed 00:06:16.920 --> 00:06:21.520 by the German Federal Ministry for Economic Cooperation and Development. 00:06:21.520 --> 00:06:23.280 What has been achieved so far? 00:06:23.800 --> 00:06:25.120 Among other things: 00:06:25.720 --> 00:06:29.000 - 1.8 million square kilometres of forest 00:06:29.000 --> 00:06:31.960 have been preserved through sustainable management; 00:06:32.280 --> 00:06:38.200 - 1.4 million kilowatts of additional renewable energy production capacity has been created; 00:06:38.560 --> 00:06:43.200 - greenhouse gas emissions have been reduced by 36 million tonnes 00:06:43.200 --> 00:06:45.920 (measured in CO2 equivalents) 00:06:47.560 --> 00:06:49.920 More transparency on the expenditures, 00:06:49.920 --> 00:06:53.840 which are allocated to the proceeds of the Green Federal Securities, 00:06:53.840 --> 00:06:57.120 and their future contributions to a greener environment, 00:06:57.120 --> 00:07:00.120 will be provided by two special reports. 00:07:00.600 --> 00:07:04.120 An allocation report, which shows the exact shares 00:07:04.120 --> 00:07:06.720 and structure of the chosen public expenditures, 00:07:06.720 --> 00:07:10.320 will be published annually from 2021 onwards. 00:07:10.760 --> 00:07:14.720 All Green Federal Securities issued within a calendar year 00:07:14.720 --> 00:07:17.280 will receive a proportional allocation 00:07:17.280 --> 00:07:21.480 of the eligible green government’s expenditure of the preceding year. 00:07:21.640 --> 00:07:28.080 The German Government intends to issue at least one green security in every calendar year. 00:07:28.480 --> 00:07:31.080 An impact reporting will be published as well. 00:07:31.400 --> 00:07:35.400 This will happen at least once during the lifetime of a Green Security. 00:07:35.400 --> 00:07:39.520 and for each green expense-category that has been allocated. 00:07:39.880 --> 00:07:42.720 Quantified metrics of environmental impacts 00:07:42.720 --> 00:07:46.960 or key performance indicators like concrete CO2-reduction. 00:07:47.200 --> 00:07:50.720 Analytical reports about the environmental efficiency. 00:07:51.000 --> 00:07:55.520 Listing and description of the individual or exemplary projects. 00:07:55.920 --> 00:07:58.920 Thus, Green German Federal Securities 00:07:58.920 --> 00:08:02.240 stand for the highest quality and transparency, 00:08:02.240 --> 00:08:04.400 just like their conventional twins. 00:08:04.680 --> 00:08:08.280 For further questions relating to Green Federal Securities, 00:08:08.280 --> 00:08:11.640 please contact German Finance Agency under 00:08:11.640 --> 00:08:18.080 inst@deutsche-finanzagentur.de.