Who / What
A green bond is a fixed-income financial instrument used to fund projects with positive environmental benefits. They are governed by the Green Bond Principles established by the International Capital Market Association (ICMA).
Background & History
Green bonds emerged as financial instruments to direct capital toward environmentally sustainable projects. They gained formal structure with the introduction of the Green Bond Principles by ICMA, which provided guidelines for their issuance and use. The term "climate bonds" is also used when referring specifically to bonds funding climate change mitigation initiatives.
Why Notable
Green bonds are notable for channeling investment capital specifically toward environmental sustainability projects. They represent a significant development in sustainable finance by creating a dedicated market for eco-friendly investments. Their adherence to internationally recognized principles helps ensure transparency and credibility in environmental financing.
In the News
Green bonds remain relevant as global attention focuses on climate finance and sustainable development goals. Recent years have seen growing issuance volumes as both public and private entities seek to align financing with environmental objectives.
