If you're greening and you know it...

... issue a green bond and start reporting emissions.

As I was quietly digesting the abundance of Christmas in the last week of the year, a headline caught my attention during one of my daily email checks. The headline, from the Wall Street Journal, said Oil-and-Gas Companies Seek ESG Loans, Pledging Emissions Cuts.

Well, what do you know, I said, oil and gas are getting on the green bond train and they’re doing it just as regulators begin to tighten the noose around its locomotive, if you will pardon the weirdly mixed metaphor. Talk about bad timing. Or maybe this is the latest manifestation of greenwashing?

Now, first of all, the sort of debt the WSJ article discusses is not, strictly speaking, green bonds. The proceeds from these ESG bonds, we learn, can be used for more than just advancing emission-cutting goals, which would be welcome for any company seeking fresh financing.

The catch is that if the issuer does not book progress on those goals, its interest rate jumps and if it does, the interest rate on the bond falls. Sounds like a good deal, doesn’t it? Until you get to the part of the whole energy transition affair that’s fast becoming my favourite: progress reporting.