Sustainability bonds are bonds where the proceeds are exclusively applied to finance or re-finance a combination of both green and social projects.
Low - limited evidence available
Enabling conditions and success factors
- Requires adherence to Sustainable Bond Guidelines.
- Investor demand for sustainable bonds is high.
- Bonds support significant upfront investment into larger and longer-term investments.
- Similar performance as regular bonds (including risk profiles).
- Can help diversify the investor base.
Challenges and risks to implementation
- Not easy to find bankable projects to fund.