The report produced in collaboration with Imperial College Business School, shows that for many market participants, the main function of a green bond is to act as a cost-free signal to stakeholders of a firm’s commitment to improving the environmental performance of their portfolio.
It also highlights a growing appetite among a wide range of entities to use green bonds, including multilateral institutions, corporates and sovereigns. The core distinguishing feature between green bonds and conventional bonds is the promise that the proceeds raised by green bonds will be used for environmentally-friendly projects.
‘Understanding green bonds’ is part of an ongoing research collaboration between TheCityUK and the Centre for Climate Finance & Investment at Imperial College Business School. Previously, we jointly produced research providing a broader analysis of green finance: 'Growing green finance'.