Road to COP26: Green bonds are the new stars of climate finance but questions remain

Not all green bonds are equal

A window of opportunity for investors has opened in the form of green bonds as the urgency to curb global warming pressures governments to deliver environmentally-friendly projects. However, questions about the purpose of green bonds remain.

Some $33trn must be invested in low-carbon energy by 2050 to reduce emissions, according to the International Renewable Energy Agency. That sort of money can be found only on capital markets and investors are mobilising. Global green bond issuance, which was almost non-existent a decade ago, reached $97bn in 2016, $290.1bn in 2020, and is now on track for a record half trillion year; it reached $496.1bn in the first half of 2021, according to figures from the Climate Bonds Initiative. For 2023, the projection is $1trn. These record sales are pushing sustainable investment forward as i...