In this article, we highlight the latest trends in the green bond market, possible opportunities of SDGs integration into the green bond assessment framework and impact valuation of green projects financed using proceeds from the bond.
The “story” of GreenBond Every successful revolution has its own story – it usually starts with noble intentions of brave, forward-thinking individuals, communities, organisations and governments, to bring positive change to the society. The evolution of the green bond1 is no different – what initially begun as a traditional framework for raising capital to fund ‘green’ activities with an environmental benefit, to an instrumental “game changer” to spark a sustainability revolution in the market.
The first green bond was issued by the World Bank in 2008. The World Bank was approached by a group of Swedish pension funds, which were looking for avenues to make climate-friendly investments – built upon a structured framework that supports identification and measurement of how their investments would achieve the intended outcome and impact. It was the first to define the criteria for projects eligible for a green bond.
The issuance of the first green bond marked a significant milestone in the global sustainable development journey – strengthening the business case for environmental sustainability, particularly in shifting investors’ focus and providing a refreshed perspective – in considering green investment opportunities for profitable returns.