Duncan says local councils could also offer green bonds, while manufacturers could potentially use them to fund plant upgrades to more energy efficient technology.
HSBC has been making approaches to potential Kiwi issuers of green bonds, he says.
"We think New Zealand is a prime candidate for them. I think it ties in nicely with the 100 per cent pure ethos and the green brand that New Zealand enjoys globally."
Ulrik Ross, managing director of HSBC London, says green bonds are the fastest growing segment of the fixed-income market. He believes green bond issuance has the potential to rise from the current US$32 billion ($41 billion) a year to US$60 billion annually by next year.
"I can easily see that we could surpass US$100 billion in annual issuance in three to five years from now," Ross says. "I would say that on a broad basis [green bonds] are applicable to the main industries we see across corporates, local governments ... and financial institutions."
Ross says fund managers, especially in Europe, are driving much of the investor demand for green bonds.
Many institutional investors need to demonstrate to clients that they are meeting ethical investment guidelines.
"Investors are now starting to mobilise their portfolios around [green bonds] as managers see this as a business opportunity," says Ross.
One of the biggest risks facing the green bond market, he says, is "green-washing" - issuers promising to invest capital raised into environmentally sustainable projects, but not delivering on that promise.
"You need to have traceability in your process all the way from bond issuance to disbursements," Ross says.
