Green Bonds: Lasting Solutions For Climate Change



The following content is sponsored by IFC (World Bank Group)

green bonds infographic

Green Bonds: Lasting Solutions For Climate Change

How much will it cost to combat climate change? By some estimates, a staggering $50 trillion. And while this may seem like an impossibly daunting figure, you should know there is a solution to this financing gap: green bonds.

But having only been around for a little over a decade, they are still a relatively unfamiliar investment for many.

The above infographic from IFC explores the exciting world of green bonds, which are gaining serious traction in financial markets.

Green Bonds 101

To begin, green bonds are not that different from regular bonds. Both are debt instruments or fixed income securities that pool capital from investors for a specified project or objective. But while Fortune 500 companies issue bonds to generally enhance their bottom line, green bonds differ in their commitment to eco-friendly ventures and sustainability.

Here’s a closer look at the anatomy of bonds, including green bonds:

  • Yield: The fixed coupon rate as a % of the market value of the bond price.
  • Maturity: The predetermined length of the bond.
  • Credit Rating: The rating bonds receive to determine their riskiness and quality.
  • Bond Price: The price of the bond purchase (typically starts out in $1,000 denominations).
  • Coupon: The payment on the bond usually occurs in semi-annual or quarterly installments.

Unlike bonds which have been around for centuries, dating back to the Mesopotamian times, green bonds are (Read more...)