Jul 14, 2022
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The effects of climate change is one of the greatest challenges for humanity. Can green bonds be an effective tool in this fight? What are green bonds? Green bonds are a type of fixed income, issued by public or private entities, in order to finance projects related to climate change and the environment . They are also known as weather bonds. They have their origin in 2007, after a swedish pension fund demanded a type of bond that was respectful of the environment. Shortly after, the european investment bank (eib) issued a “climate awareness bond”, worth 807 million dollars, dedicated to financing renewable energy and energy efficiency projects. The first green bond . Since then, the number of investors who want to obtain economic benefits while generating environmental benefits has e commerce photo editing been increasing. Some of the projects behind these bonds are those that fight against climate change, the depletion of natural resources, the loss of biodiversity, adequate air, soil and water quality, investments in renewable energies and energy efficiency . How do green bonds work? We start from a simple idea: you allocate the money to projects that fight against climate change and, at the same time, offer you the possibility of controlling what is being done. This is how they differ from other bonuses and where they make a difference. Inesem business school master in energy transition: energy saving and renewable energies more information in other words, it is an ordinary bond intended to finance some type of project with an environmental benefit, with the additional component of providing greater information transparency. For the investor, it has the advantage of knowing what type of projects their money is going to, because the issuer provides information regarding the environmental impact of said projects. In this way, the investor can align his investment with the environmental impact.