Green bond

A Green bond (also known as climate bond) is a fixed-income financial instruments (bond) which is used to fund projects that have positive environmental and/or climate benefits.[1][2] They follow the Green Bond Principles stated by the International Capital Market Association (ICMA),[3] and the proceeds from the issuance of which are to be used for the pre-specified types of projects.[1]

Like normal bonds, climate bonds can be issued by governments, multi-national banks or corporations and the issuing organization repays the bond and any interest. The main difference is that the funds will be used only for positive climate change or environmental projects. This allows investors to target their environmental, social, and corporate governance (ESG) goals by investing in them. They are similar to Sustainability Bonds but sustainability bonds also need to have a positive social outcome.[4]

  1. ^ "Explaining green bonds". 10 December 2014. Archived from the original on 2020-04-24. Retrieved 2020-04-14.
  2. ^ "Climate bonds Standard v2" (PDF). Archived (PDF) from the original on 2019-11-25. Retrieved 2020-04-14.
  3. ^ "Green Bond Principles". www.icmagroup.org. Archived from the original on 2020-05-30. Retrieved 2020-05-22.
  4. ^ "Green, Social and Sustainability Bonds". Archived from the original on 2020-04-21. Retrieved 2020-04-14.