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Leg up for green bonds amid record sustainable debt in 2020

  • Posted By
    10Pointer
  • Categories
    Environment
  • Published
    18th Jan, 2021

Context

  • Sustainable debt worth $732 billion issued globally; $305 billion of that in green bonds.

What is Green bond?

  • Green bond is a fixed-income instrument designed specifically to support specific climate-related or environmental projects.
  • Green bonds typically come with tax incentives to enhance their attractiveness to investors.
  • In 2009, the World Bank issued the first official green bond.

What are Sustainability Bonds?

  • Sustainability Bonds are bonds where the proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social Projects.

Effect of COVID-19 on Sustainability Bonds

  • COVID-19-related disruption affected issuance of some sustainable debt instruments in 2020, but spurred others.
  • Overall growth of almost 30% in the market showed that sustainability continues to rise up on the agenda for investors, businesses and governments.