Sustainability-linked bonds could help finance the transition of carbon-heavy companies, but only if the issuers are serious about climate. The green bond market is on fire, channeling record funds into climate-friendly projects around the globe promising synergy between investors chasing ESG products and the need for climate finance, especially in developing countries.
In the first half of 2021, the total value of new green bonds issued reached almost $250 billion, more than the value of all bonds issued in all of 2020. Green bonds have proven to be an effective way to mobilize private capital as they have the same fundamental risk and return characteristics as conventional bonds.
With the EU beginning to issue green bonds and predictions that have annual green bond issuance hitting $1 trillion by 2023, many have been left wondering: “What exactly is a green bond?” Green bonds allow investors to buy bonds that make a specific impact on the environment, especially climate. And now there’s social, sustainability, and positive impact bonds.
The green bond market has played an increasingly important role in financing assets needed for the transition to a low-carbon future. In 2021 labelled green bond issuance as a percentage of the total has grown to 20% in Europe and 3% in the US.
My book, Investing in a New Climate is not about doom and gloom, but about adapting to different kinds of “changes” in our world. Climate change is about the shifting of circumstances. To survive — and succeed — we must adapt. What impact will a new meteorological climate means to economies, industries, and financial markets around the world?
Paul Hawken’s new book explains how Regeneration creates abundance, not scarcity. It expands what is possible. It is about the optimism of action instead of the pessimism of thought. Regeneration is an inspiring and necessary guide to today’s climate movement that will enable readers to understand its many facets — and more importantly, to act.
“Americans, especially younger generations, increasingly prioritize and support local economies. We are arriving at a collective conclusion that global and domestic problems need local solutions and investing in place-based opportunities can offer investors appropriate risk-adjusted returns while positively impacting our communities to be better, greener, and more just.” – David Sand, Chief Impact Strategist at Community Capital Management
With so many investment options geared towards ESG strategies, it can be hard to identify ones that drive direct and measurable impact towards their desired causes. Sustainable infrastructure projects have a great story to offer when considering community impact. Dollars are invested directly into tangible benefits to communities, people, and the environment.
ESG is necessary but insufficient. The IPCC Report delivered an expected but still major jolt to the global financial community. Now, the question is, how should global finance respond to the report’s urgent recommendations? Is the widely adopted ESG approach the best way to successfully mitigate carbon emissions to meet Paris Agreement goals?
Investing in low-income communities struggling at the margins of the economy has been a pillar of SRI for more than half a century – the movement has broadened to include “sustainable” and “impact investing.” While faith-based and other investors have also launched corporate dialogues, screened investments and proactively invested in communities.
