"Green Bonds" are a relatively new trend in the bond
market. They offer investors an opportunity to invest in
"green projects" that help mitigate climate change.
Categories of green projects include renewable energy, energy
efficiency, sustainable waste management, sustainable land use and
biodiversity conservation. Green Bonds have similar features to
regular bonds and can be issued on a tax exempt basis (if certain
criteria are met). The market eventually hopes that Green Bonds
will receive favorable pricing because more investors will be
seeking out such socially conscious investments in order to be
viewed as good global and environmental citizens.
Initially, one of the issues with Green Bonds was that there was
no independent assessment system to allow investors to review the
probability that the project being financed with Green Bonds would
achieve positive environmental outcomes. This type of assessment
was a concern, especially of institutional investors that
