Florida Investment Network


Recent Blogs


Pitching Help Desk


Testimonials

"Thank you very much for the extra input with my Restaurant/Nightclub proposal. I already have a couple investors who are requesting more info, and that's less than 24hrs after submitting the proposal to you. I am very pleased."
Rodrick Agcaoili


 BLOG >> Recent

Green Bonds are Taking Off [Finance
Posted on September 4, 2014 @ 10:31:00 AM by Paul Meagher

Green Bonds are ways for Governments, Municipalities, Financial Institutions, and Corporations to raise money to support a broad range of green initiatives from erecting wind turbines, to reclaiming brownfield sites, to addressing issues related to climate change, etc... The promise of Green Bonds, like any bond, is that you will get an assured return on your investment after a certain term by providing debt capital to these organizations.

The issuance of Green Bonds has been growing rapidly over the last few years with many financial institutions and corporations getting into the game at a rapid rate. The climatebonds.net website keeps a tally of how many green bonds have been issued to date and this year is set to break new records again for the amount of green bonds issued - going from approximately $11 Billion last year to an estimated $40 Billion this year.

Table showing Green Bond issuance by month

One reason why Green Bonds are taking off is because, according to this economist article, "55% of pension-fund assets are exposed to climate risks (including heavier regulation of dirty industries); buying green bonds helps offset such risks". So pension funds want to buy into Green Bonds to hedge against climate risks that other companies in their portfolio might be subject to.

Another reason would include the fact that "US Green Bonds" as issued by the US Treasury are tax-exempt investments to incentivize investors to buy into them.

Another reason is that corporations see them as a useful way to raise money for certain types of projects. Because green bonds are growing in popularity it is getting easier to raise capital quickly by issuing "Green Bonds" for their green projects.

Finally, many of the projects that these green bonds are being used to finance are simply good investments. Many green energy projects, for example, have relatively low risk with stable long terms returns so why not invest in them.

The story on what green bonds are and how they work is just beginning. Many see a bright future for Green Bonds in helping solve a host of environmental problems. As with anything with the label "Green" attached to it, one must be skeptical of how "green" the projects are that are being funded via "Green Bonds". There is some work to standardize the criteria used for a bond to qualify as "green" but I doubt that everyone will buy into one published set of standards. It is nevertheless worth keeping an eye on how the whole area of Green Bonds evolves in the near term as more governments, large financial organizations, and large corporations throw their hat into the ring by releasing more Green Bonds. It should mean more money to finance green projects in the near term if the rate of release and subscription to these bonds stays at its present level of growth.

Permalink 

 Archive 
 

Archive


 November 2019 [2]
 October 2019 [2]
 September 2019 [1]
 July 2019 [1]
 June 2019 [2]
 May 2019 [2]
 April 2019 [5]
 March 2019 [4]
 February 2019 [3]
 January 2019 [3]
 December 2018 [4]
 November 2018 [2]
 September 2018 [2]
 August 2018 [1]
 July 2018 [1]
 June 2018 [1]
 May 2018 [5]
 April 2018 [4]
 March 2018 [2]
 February 2018 [4]
 January 2018 [4]
 December 2017 [2]
 November 2017 [6]
 October 2017 [6]
 September 2017 [6]
 August 2017 [2]
 July 2017 [2]
 June 2017 [5]
 May 2017 [7]
 April 2017 [6]
 March 2017 [8]
 February 2017 [7]
 January 2017 [9]
 December 2016 [7]
 November 2016 [7]
 October 2016 [5]
 September 2016 [5]
 August 2016 [4]
 July 2016 [6]
 June 2016 [5]
 May 2016 [10]
 April 2016 [12]
 March 2016 [10]
 February 2016 [11]
 January 2016 [12]
 December 2015 [6]
 November 2015 [8]
 October 2015 [12]
 September 2015 [10]
 August 2015 [14]
 July 2015 [9]
 June 2015 [9]
 May 2015 [10]
 April 2015 [10]
 March 2015 [9]
 February 2015 [8]
 January 2015 [5]
 December 2014 [11]
 November 2014 [10]
 October 2014 [10]
 September 2014 [8]
 August 2014 [7]
 July 2014 [6]
 June 2014 [7]
 May 2014 [6]
 April 2014 [3]
 March 2014 [8]
 February 2014 [6]
 January 2014 [5]
 December 2013 [5]
 November 2013 [3]
 October 2013 [4]
 September 2013 [11]
 August 2013 [4]
 July 2013 [8]
 June 2013 [10]
 May 2013 [14]
 April 2013 [12]
 March 2013 [11]
 February 2013 [19]
 January 2013 [20]
 December 2012 [5]
 November 2012 [1]
 October 2012 [3]
 September 2012 [1]
 August 2012 [1]
 July 2012 [1]
 June 2012 [2]


Categories


 Agriculture [71]
 Bayesian Inference [14]
 Books [15]
 Business Models [24]
 Causal Inference [2]
 Creativity [7]
 Decision Making [15]
 Decision Trees [8]
 Design [37]
 Eco-Green [4]
 Economics [12]
 Education [10]
 Energy [0]
 Entrepreneurship [61]
 Events [2]
 Farming [20]
 Finance [25]
 Future [15]
 Growth [18]
 Investing [24]
 Lean Startup [10]
 Leisure [5]
 Lens Model [9]
 Making [1]
 Management [9]
 Motivation [3]
 Nature [22]
 Patents & Trademarks [1]
 Permaculture [34]
 Psychology [1]
 Real Estate [2]
 Robots [1]
 Selling [11]
 Site News [15]
 Startups [12]
 Statistics [3]
 Systems Thinking [3]
 Trends [7]
 Useful Links [3]
 Valuation [1]
 Venture Capital [5]
 Video [2]
 Writing [2]