If 2013 was the year the green bond market finally took root, 2014 could very well be the one it begins to flourish. One sign of the market’s maturation is the arrival of the first index dedicated entirely to green bonds. The Solactive Green Bond index, launched March 12 by Frankfurt-based index provider Solactive, comprises bonds categorized as green — that is, those that raise capital for a project with specific environmental benefits — by the Climate Bonds Initiative, a nonprofit organization headquartered in London.

To date, the index includes 33 bonds, all at least $100 million in size and of varying credit ratings, with a total market value of $19.3 billion. Most of the bonds have been issued by utilities and energy companies for renewables projects or by supranational organizations, such as the World Bank’s International Finance Corp. , the European Investment Bank and the African Development Bank. The former includes November’s €1.4 billion ($1.9 billion) bond issue from French energy group Electricité de France (EDF), the first euro-denominated green bond from a large company, which was reportedly twice oversubscribed.

The recently issued £250 million ($415 million) bond that hit the market March 19, from London- and Rotterdam, Netherlands–based Unilever, the world’s third-largest consumer goods firm, will also be included.

The Unilever issue marks another first for green bonds and could help turn them from a niche product into a mainstream financial instrument. That's because the company plans to use the proceeds not for a self-evidently green project such as renewable energy but to reduce the environmental footprint of its ordinary activities by decreasing waste, water use and greenhouse-gas emissions. 

The Solactive index does not include securitizations, so the company will not add the recent offering from Toyota Motor Corp., the first green auto securitization, launched in late March. Still, this deal can be cited as yet another sign of the market’s development. Backed by future loans and leases of hybrid and electric vehicles, the deal priced at $1.75 billion, more than twice its original $775 million.

“The issue was very well received. It was well understood that Toyota has a good following,” says Michael Eckhart, global head of environmental finance and sustainability for Citigroup in New York, which served as joint book runner along with Bank of America Merrill Lynch and Morgan Stanley. “This broadened the investor base to some extent, bringing socially responsible investors to a Toyota placement for the first time.”