The Role of Green Bonds in Sustainability Efforts

ShodhKosh: Journal of Visual and Performing Arts, 2024

The increasing urgency of climate change and environmental degradation has prompted a significant shift in corporate investment strategies towards sustainable finance, particularly through green bonds. This paper explores the emergence of green bonds as a pivotal instrument in corporate finance aimed at funding projects that have positive environmental impacts. We analyze the growth of the green bond market, identifying key trends, challenges, and opportunities within corporate investment strategies. By examining case studies and recent data, this study aims to elucidate the evolving landscape of sustainable finance and its implications for corporate governance, risk management, and stakeholder engagement. The findings underscore the importance of integrating sustainability into corporate financial frameworks to foster a resilient and responsible economic future.

Journal of Sustainable Finance & Investment , 2020

Green bonds are one of the most prominent innovations in the area of sustainable finance over the past decade. However, to date there have only been a few academic studies on green bonds, and these have tended to focus on what impact green labels have on bond yields. Our analysis is one of the first empirical studies designed to address the broader questions of what attracts investors and issuers to the green bond market, the role of green bonds in shifting capital to more sustainable economic activity, and how green bonds impact the way organisations work with sustainability. Using Sweden as a case study, this paper provides insights into the rapid growth of the green bond market and how green bonds affect market participants’ engagement with sustainability that are easily missed if one focuses only on how green bonds are marketed.

Proceedings of the International Conference on Business Excellence, 2020

As the investor base committed to financing sustainable companies in an attempt to combat the climate crisis expands, green financial products have become more attractive to issuers, corporate and sovereign alike. As a result, the EU is attempting to create favourable market conditions which mobilise the allocation of private capital for investments that reduce the contribution to climate change. As part of the EU Commission’s Action Plan for Sustainable Finance, it intends to create Green Bond Standards which aim to support the transition to greener securities investments. As a foundation, we provide an overview of the green bond market development. We then consider investment challenges such as incentivisation and transparency and discuss whether the Green Bond Standards shall likely resolve these issues. Furthermore, we confer that enforceability of current green securities regulations is weak to non-existent and propose possible policy approaches which address these issues.

Journal of Governance and Regulation, 2019

In the last few years, there has been growing attention by enterprises and investors concerning the adoption and implementation of strategies and decisions characterised by a strong social and environmental impact. 2018 represented a fundamental year for renegotiations on the climate, in fact, following the COP 21, the aim was of both producing a "Rulebook" in order to carry out all the details received from the Paris agreement and a "Talanoa Dialogue" aiming at informing the parties of all the carried-out progresses. In this scenario, green bonds represent the financial tool that better meets the enterprises need to collect capital as well as the possibility of conveying the latter through strict obligations towards high environmental impact initiatives. Considering the high potential in using this tool, this work aims at investigating, in a double perspective, from both the issuing companies and the investors' point of view, risks and opportunities. In particular, the possibility not only to diversify the financial sources but also to carry out a strategic plan to guarantee value creation in the long term (LTVC) and to preserve the environment. The most important goal of this work is to supply a reference framework conveying the main aspects to consider and evaluate.

South African Journal of Science, 2020

One of the greatest challenges facing the global community is climate change. 1 Over many years, global leaders have embarked on various platforms in a concerted effort to combat climate change. 2 One of the key platforms has been the annual Conference of the Parties (COP)-a regular meeting in which climate negotiations and high-level political discussions have taken place. 2 In 2015, the 21st COP was the most important because 195 countries agreed to ensure that rising global temperatures do not exceed the safe zone of 1.5 °C, as it is forecasted that temperatures will continue beyond this value between 2030 and 2050 if no action is taken to combat climate change. 3 The parties further agreed that climate investments for countries are critical to make enormous transformational changes to reduce their greenhouse gases by scaling up climate adaptation and mitigation strategies. 3

Review of Financial Markets, 2020

The need for changing the current world economic development paten was hovering in the air for decades. By the end of the 20th century, several high profile international organisations raised their voices to switch from single indicator analytics that proved sustainability by economic growth data only. So in May 1990 the United Nations Economic Commission for Europe (ECE) raised the issue of the environment and its safety for future generations during the so-called "Bergen Conference on Sustainable Development" that the Environment Ministers from 34 countries and the EC Commissioner for the environment attended (The Bergen Conference and its proposals, 1993). Gradually it became ever more apparent that the idea of sustainability should transcend material concerns and embrace a variety of factors such as the quality of life and health, environmental efficiency, stronger communal relationships, fullness of participation in the life of society and others. The need for broadening the variables in defining sustainability has become even more acute within our time that can be defined as ‘postnormal times’ (Sardar, 2010). The world around us, including economy, is no more the same we used to have and requires coming up with new norms, conventions and rules. The subsequent paper aims to contribute to this process in Kazakhstan feasibly. Believing that green finance and Islamic finance instruments can play a critical role in the post-normal Kazakhstani economy, the discussion focuses on financial instruments that we dubbed ‘post-normal bonds’. The essay seeks to show how it merges the best trends of Green Bonds (GB) and Islamic Bonds (IB), thus answering the challenge of surviving and flourishing in post-normal (PN) economy.

Vierteljahrshefte zur Wirtschaftsforschung, 2019

European governments are striving to meet the ambitious goals of the Paris Climate Agreement of 2015. The German government wants to limit the CO 2 emissions so that the global temperature increase does not exceed 1.5 degrees Celsius. How this aim will be achieved concretely is still an open question. However, concrete steps must be decided upon urgently. Sustainability Policies In sustainability policy, two main concepts are under discussion: CO 2 pricing and "green investments." The latter, in turn, could be financed through the issuance of "green government bonds," i. e. bonds issued by the public purse for green investment. The Federal Ministry of Finance in Germany recently pushed forward considerations in this direction. Green bonds are also an essential part of the Green Finance policy of the EU Commission. Duco Claringbould, Martin Koch, and Philip Owen provide in their work, Sustainable finance: the European Union's approach to increasing sustainable investments and growth-opportunities and challenges, an overview of the most important current EU initiatives contributing to sustainable finance. The authors outline the need for sustainable finance to achieve EU and international policy goals and to provide a discussion of sustainable finance from a theoretical perspective. They review the most important existing EU initiatives to foster sustainable finance: the Action Plan on financing sustainable growth, the EU Emissions Trading System, and EU financial support contributing to sustainable finance. The Action Plan aims to develop an EU Green Bond Standard, as well as benchmarks for low-carbon investment strategies and climate-related reporting. The authors also provide a discussion of the challenges and political implications of current sustainable finance policies for the EU.

2023

Environmental nance and green banking are central drivers of the transition to a sustainable economy and essential components in solutions to climate change. This book presents the latest research on theory and practices in these interdisciplinary elds, incorporating both public and corporate nance. It introduces three parts-environmental investing and nancing, green banking and environmental policies in the public sector. The book explores the current trends, dynamics and ways forward for environmental nance and green banking, including fundamental theories (e.g., environmental Kuznets curve) and comparisons between traditional and green bond e ciency, corporate governance practices and disclosure, green central banking, climate nance, sustainable strategies, green Islamic banking, and public climate fund management in multi-country contexts. The contributors to this book highlight signi cant challenges ahead while recognizing potential opportunities, such as the revolution in green investments and trading in green bonds. This book is a welcome addition to the literature on environmental economics and nance and the economics of sustainability and climate change.

2020

The paper analyses green bonds as sources of financing renewable energy projects. Green bonds are a relatively new form of financing and thanks to increased investors’ climate awareness, the market has seen an enormous growth in the last few years. Therefore, the guidelines and standards adopted in financial markets clearly indicate what should be considered a green investment and are a key to further development of the market and achieving the goals of green financing. The goal of the theoretical approach to green bond market in the paper is to identify the key barriers that prevent many countries from taking advantage of this new but growing source of financing renewable energy. The lack of appropriate institutional arrangements for managing green bonds, issuing a minimum volume and high transaction costs are the key obstacles to the development of green bond market. The overall conclusion of the paper is that with just the right measures, many countries could make full use of gre...

Journal of Business Management and Information Systems

Green bonds in Indian market play a vital role to shape the debt market and to position the environment sustainability by generating funds specifically for green projects. The objectives of this paper is to understand the green bond as an environmental sustainable tool and further to draw the trend of green bond and challenges so far in context to the Indian financial market. The emergence of green/climate bonds takes place from Paris Agreement in 2015 where 188 countries sign up to limit the rising temperature by less than two degree Celsius and India is one of the countries to sign the agreement. The paper is based on a descriptive study using secondary data source from several government reports, other published reports and banking sector reports. The paper concludes that the green bond successfully fulfils criteria to become a sustainable tool which can be seen as an investment opportunity alternative to equity funds, other corporate bonds. The green bond trend is upward sloping...

Carbon Management, 2010

Finance is the supporting means for the implementation of mitigation and adaptation activities in an international climate agreement. However, discussions on finance under the UNFCCC umbrella have come to a stalemate on definitions. The most promising source of finance, the private sector, has become a polarising issue in the negotiations. Yet, outside of the negotiations, there is some good news: investors are becoming more aware of climate risks and considering the potential impacts on their investments. Universities and pension funds are actively considering divesting from fossil fuel. Many of the green bonds issued by development banks, and now by corporate entities, were sold out within minutes of issuance. If the potential demand for private-sector investment is to be harnessed, three key questions need to be addressed: How might the opportunities and challenges be used to catalyse the burgeoning interest in private financing for climate activities? What can the public sector ...

Shodh Sanchar Bulletin, 2020

Green Finance includes all initiatives taken by private and public banks, businesses and international organizations in developing, promoting, implementing and supporting projects with sustainable impacts through financial instruments. Green finance represents the future of financial sector through innovative financial mechanisms. This paper is written in a simple language to make everyone understand What is Green Finance? It concentrates on the evolution and concept of green finance, global impact and challenges and green finance during COVID-19. This is a Descriptive study carried only with secondary source of data. Finance is an Ocean and Green Finance is a little drop of an Ocean.

KOREA REVIEW OF INTERNATIONAL STUDIES , 2023

In today's world, the sole pursuit of financial gain by organizations is a thing of the past. Instead, there is a growing recognition of the vital importance of natural resource preservation and environmental protection across all aspects of life. This shift has prompted extensive global research to uncover innovative strategies for achieving sustainability. To address the urgent need to safeguard the environment, combat climate change, invest in renewable energy sources, expand green spaces, and support various sustainable development endeavour's, the concept of "Climate Finance" has emerged. This article delves into the multifaceted components of green financing, encompassing green banking, green insurance, and green bonds. Furthermore, it explores the potential and challenges associated with Climate Finance. Drawing from contemporary literature, the article endeavours to shed new light on Climate Finance as a valuable tool for promoting sustainability, particularly in developing nations like India.

This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. ISBN 978-92-64-27231-6 (print) ISBN 978-92-64-27232-3 (PDF) Series: Green Finance and Investment ISSN 2409-0336 (print) ISSN 2409-0344 (online) Photo credits: Cover © mika48/Shutterstock.com.