Green bonds: why and for whom?

Through the targeted allocation of the funds it attracts, this type of loan is a credible vector, in particular for supporting the energy transition.

You share the conviction that the redirection of financial flows must be accelerated towards projects promoting the emergence of a more sustainable economy for the environment and land resources. And you are ready to put your money where your mouth is in return for a decent and regular return on your capital. So think about tinting your portfolio with green bonds, also called “green bonds”. Through the targeted allocation of the funds it attracts, this type of loan is a credible vector, in particular to support the energy transition. Your decision will also allow you to reconcile your environmental preferences with your performance objectives.

Funds earmarked for specific projects

Green bonds are similar to ordinary loans. However, they differ in the issuer’s commitment to allocate all the funds collected to positive projects for the environment, which have been clearly determined in advance. According to market standards, the borrower must also offer maximum transparency to creditors by providing information, verified by a third party, on the progressive commitment of capital raised as well as on the progress of projects.

It’s up to everyone to make their own choices

Green bond issuers can be states, supranational organizations or any company. So don’t be surprised to find, in the list of borrowers, some hydrocarbon champions who are financing the decarbonization of their business model in this way. Barrier or not? The offer of “green bonds” and investment funds in green bonds is now sufficiently large for everyone to be able to choose their exposure according to their ambition in terms of sustainability, without neglecting their objectives in terms of risk and of financial performance.

Article published in 24 Hours, March 20, 2023