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Industry Voice: Climate change acts as catalyst to green bond market growth

The significant impact of climate and environmental changes across the globe has become increasingly apparent, with the world about to record its warmest five years on record and warnings of a collapse in biodiversity.1 In financial markets, the result has been a corresponding increase in demand for investments that can help fund projects with positive environmental and/or climate benefits.

Green bonds made their first appearance in 2008 with an issue from the World Bank. Since then, growing concerns about greenhouse gas emissions and climate change have prompted a surge in environmental, social and governance (ESG) mandates and an increase in bond issuance to help finance climate-related projects. Green bonds have quickly become common across jurisdictions, industries and currencies. Today, European countries are taking the lead; several major governments, corporates and financial institutions have now issued green bonds, with others potentially to follow.

 

 

 

1 Sources: UN Environment Programme, “How Climate Change is Making Record Breaking Floods the New Normal”, 3 March, 2020, The Nature Conservancy, Financing Nature Report, Closing the Global Biodiversity Financing Gap, 2020.

 

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