Leg up for green bonds amid record sustainable debt in 2020

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

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.