Measuring the impact of green bonds
Green bonds have become firmly entrenched in the global debt market. Although green bonds are still dwarfed by the overall fixed income market, the asset class has now exceeded $1.5 trillion of cumulative issuance according to the Climate Bonds Initiative, and corporate and sovereign entities alike are now issuing green bonds.
Green bonds fund projects with clear environmental benefits and, in particular, projects that avoid carbon emissions compared with a conventional approach. Renewable energy, green transport and green buildings make up the bulk of green bond-financed projects.
At S&P Global Sustainable1, we believe that quantifying these environmental benefits will contribute to developing a green bond market that is robust, credible and transparent. Investors need to be able to quantify and monitor the impact of their green bond investments in their overall net zero investment strategy and report on that positive impact in a consistent manner.