As the market for ESG certified bonds grows, Oregon-based Kestrel Verifiers grows with it.
The eight-person, women-owned company added two new employees this year and has won renowned clients such as Stanford University, the American Museum of Natural History in New York, and the cities of Boston and Seattle, the latter being a joint project with Ipreo, said Monica Reid, Founder and CEO.
“We are rapidly gaining market share on external reviews in the United States, particularly in public finances,” said Reid.
A record net $ 51 billion was invested in funds with environmental, social and governance incentives in 2020, more than double the previous year, according to Morningstar Data, wrote Tom Kozlik, head of municipal strategy and government. credit to Hilltop Securities, in a June 10 municipal commentary. .
Reid estimates that Kestrel provided around 68% of the second-party opinions for ESG projects in US public finances. The company has managed $ 8 billion at par since its inception in 2019.
While there are around 50 companies leading second-party opinions around the world for all asset classes, only a handful target public finances. Kestrel is one of them, but also advises on corporate bond sales.
Reid’s experience as a social scientist gives her a more holistic view of the environment for infrastructure, she said.
When she formed the first Kestrel Consultants in 2000, from which Kestrel Verifiers grew, the company focused on working with innovative clients, she said, whose stories they could tell. through applications for grants and loans.
“When clients got these loans, we helped them build ongoing impact reports, some up to five years after the initial loan was made,” said Reid.
The focus is now on ESG views, and the company has said goodbye to its last consulting project in 2020 after working on loans and grants totaling $ 600 million over the past two decades. Reid also sits on the California Green Bond Market Development Committee formed by State Treasurer Fiona Ma.
Many of the company’s employees have a background in the social sciences, making it a natural fit for working on projects related to the “S” or social aspect of ESG.
One of the new hires, sociologist Melissa Aubrey, who graduated from Columbia last year and joined Kestrel in January, has focused her research on racial and social equity in the United States.
“She brings an informed perspective to help manage the social issues of affordable housing projects and those related to access to education,” said Reid.
Colorado-based investment banker Melissa Winkler, who joined Kestrel in March, said her work at Key Bank with the city of Atlanta on its green bond has sparked a desire to do more.
“I spoke with Monica for over a year about how the market works and how I could get more involved,” Winkler said.
Ultimately, Winkler decided that working with Reid and the team she had assembled in Kestrel “was the right place to be.”
On the one hand, Winkler appreciated Kestrel’s knowledge of ESG when it comes to public finances.
“The sustainable market is looking for a kind of continuity and consistency,” said Winkler. “I think external reviews play a huge role in promoting that continuity and consistency. “
Kestrel and similar companies received an additional boost when the International Capital Market Association strongly recommended that issuers selling ESG bonds seek second-party verification, rather than self-certifying.
The ICMA has just published in June the 2021 edition of its Green Bond Principles.