Sustainability bonds are bonds where the proceeds are exclusively applied to finance or re-finance a combination of both green and social projects.

Instrument category

Debt financing

Implementation status

Low - limited evidence available

Enabling conditions and success factors
  • Requires adherence to Sustainable Bond Guidelines.
Instrument benefits
  • 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.

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