Green bonds, once characterized as novelty investments, are now an integral part of institutional investors’ core fixed-income portfolios and represent the entire investment chain, ranging from corporate to municipal bonds and sovereign bonds.
Fixed-income securities that use their proceeds toward the financing of ESG-aligned projects have proven particularly attractive among investors. Their volume has been increasing exponentially since their inception by the European Investment Bank (EIB) in 2007 and following their expansion by the International Finance Corporation (IFC) in 2010.
For this special issue, we looked for articles that explore the extent to which sustainability-linked and ESG-aligned fixed-income securities can support the mainstreaming of responsible investment principles across the financial sector.
The global transition toward a low-carbon and climate-resilient economy requires common, science-based frameworks against which governments, the private sector, and individuals can determine whether activities contribute meaningfully to that transition. Developing a standardized language for determining what activities contribute to climate change mitigation and adaptation is a primary focus of international policymaking efforts to meet the Paris Agreement targets.
The definition and taxonomy of projects; the use and management of raised funds and proceeds; evaluation and certification; and information disclosure are the four key pillars that constitute the standard framework of green and climate bonds.
Climate finance is the mobilization of public and private capital toward climate mitigation and adaptation. Green bonds are one of a growing number of financial products used to facilitate climate finance investments. The green bond market has grown rapidly since the European Investment Bank’s inaugural issue in 2007.
It was a great discussion on various research methodologies for green bonds. . . . While it was quite interesting to know that private equity and venture capital can be sources of finance, it is also imperative to recognize other stakeholders in this value chain for the purpose of meeting the UNFCCC’s annual $100 billion investment target.
Tony Lent, MBA Co-Managing Partner, Aldwych Environmental and Renewables Group This past December, 196 governments signed on to a global climate agreement in Paris. One of the surprises of the conference was the strong turnout of major corporations and asset owners making public their commitment to address climate within their remits. The government plans that were agreed …