The extraordinary growth in green finance is nowhere more evident that in “green” bonds. From its origins in the mid-2000’s, when roughly $300MM was issued, to 2015 when $23BN in debt hit the markets, the industry has blossomed.
While the sum total of all green bonds ever issued is a pittance compared to the $82 trillion global market in traditional bonds, there is no dispute about the promise of securitizing the environmental benefits of energy, forestry, infrastructure and other types of projects.
Part of the maturation process of green debt comes with reaching consensus on what, exactly, a green bond is (many are self-labeled). The Global Real Estate Sustainability Benchmark (GRESB) is the latest group to contribute important thought leadership towards building that consensus. Once definitional barriers are removed, adoption of the instrument to finance projects with environmental and social co-benefits will increase. Contribute your thoughts on what the guidelines for green finance should be in the comments section below.