Linking fixed income capital to the global climate transition (2023)

1Source: Swiss Re Institute, “Decarbonization Tracker. Progress towards net zero from an investment perspective”, as of 7 October 2022.

2Source: Goldman Sachs Asset Management, Bloomberg. As of December 31, 2021.

3Source: European Investment Bank, "EPOS II - "Climate Awareness Bonds" as of 22 May 2007.

4Source: Goldman Sachs Asset Management, Bloomberg. Based on spot rates as of September 30, 2022.

5Source: European Commission, "NextGenerationEU: European Commission successfully issues first green bond to finance sustainable recovery", as of 21 October 2021.

6Source: United Nations, "UN General Assembly Unanimously Adopts Historic Sustainable Development Goals, Shaping Prospects for Global Prosperity and Peace," as of 25 September 2015.

7Source: United Nations, Paris Agreement, as of 11 November 2022.

8Source: European Commission, "The European Green Deal", as of 11 December 2019.

9Source: EU taxonomy, as of March 2020.

10Source: Glasgow Climate Convention, as of 13 December 2021.

11Source: REPowerEU, as of 26 July 2022.

12Source: IHS Markit, “China's 14th Five-Year Renewable Energy Plan: Significantly Exceeding Official Targets?” to 20 July 2022.

13Source:, “Biden-Harris administration allocates $2.8 billion to boost U.S. EV battery manufacturing, grid, beginning Oct. 19, 2022

14Source: Goldman Sachs Global Investment Research. GS SUSTAIN: Green Capex US Inflation Reduction Act through August 30, 2022: What's Transformative, What's Supportive, and What's Undervalued.

15Source: European Investment Bank, "EPOS II - "Climate Awareness Bonds" as of 22 May 2007.

sixteenSource: Vasakronan "Green Financing", as of 30 September 2022.

(Video) The role of sustainable bonds in financing the transition

17Fuente: Bloomberg News, "Massachusetts Green Bonds Mirror World Bank: Muni Deals," Jan. 3, 2013.

18Source: ICMA, Harmonized Framework for Impact Reporting, as of June 2019.

19Source: Climate Bonds Initiative, “China Roadmap”, April 2016.

20Source: United Nations, "UN General Assembly Unanimously Adopts Historic Sustainable Development Goals, Shaping Prospects for Global Prosperity and Peace," as of 25 September 2015.

21Source: Climate Bonds Initiative, “Poland wins race to issue first green sovereign bond. A new era for Polish climate policy?”, as of 15 December 2016.

22Source: Reuters, “Apple Issues $1.5 Billion Green Bond in IPO,” as of 17 February 2016.

23Source: French Ministry of Finance, "Green Oats", as of 24 January 2017.

24Fuente: Banco Mundial, "Fiji Issues First Developing Country Green Bond to Raise $50M for Climate Resilience", 17 October 2017.

25Source: ACMF,ASEAN Green Bond Standard, as of November 2017.

26Source: LSE, 'Green Bonds for People, Planet and Development', as of 13 October 2021.

27Source: European Commission, "NextGenerationEU Green Bonds", as of October 2021.

28Source: Axios, "Walmart joins green bond party with $2 billion deal", as of 10 September 2021.

29Source: Finance Canada, press release, as of March 23, 2022.

30Source: Monetary Authority of Singapore, press release 4 August 2022.

31Source: EU taxonomy, as of March 2020. It is important to note that the EU classification is not mandatory and is not intended to be an investment vehicle.

32Reuters, “Exclusive: China tightens green bond rules to align with global norms,” as of 24 August 2022.

33Fuente:Climate Bonds Initiative, “Policy Areas to Support Green Bond Market Development”, from 2022.

(Video) How to Fix the Economy and Finance the Transition

34Source: European Financial Markets Association, "Q1 2021 ESG Financial Report”, as of March 31, 2021.

35Source: Climate Bonds Initiative, "Green bonds up 25% in Q2 after turbulent start to 2022" as of 4 August 2022.

36Source: Goldman Sachs Asset Management and Bloomberg, as of September 30, 2022.

37Source: European Commission, “Q&A: First NextGenerationEU Green Bond Issuance”, as of 12 October 2021.

38Source: European Commission "Next Generation EU Green Bonds", as of January 2022.

39Source: Goldman Sachs Asset Management and Bloomberg. Annual issuance in 2022 is expected to be between 450 billion and 500 billion euros.

40Source: Goldman Sachs Asset Management and Bloomberg. The forecast assumes low market volatility in 2023 and incorporates our estimates for delayed issuance from 2022.

41Source: Climate Action Tracker, “CAT Net Zero Target Assessment”, as of November 2022.

42Fuente: Bloomberg News, "India plans to issue green bonds to raise $2 billion by March", 29 September 2022.

43Source: Science-Based Targets, "Companies Committed to Reducing Emissions Based on Climate Science Now Account for $38 Trillion of the Global Economy" as of 12 May 2022.

44Source: J.P. Morgan, Bond Radar. Based on year-to-date circulation as of September 2022.

45Source: EPFR, Goldman Sachs Global Investment Research ESG Credit Monitor. As of September 13, 2022.


Duration is a measure of the price sensitivity of fixed income investments to changes in interest rates.

Net zero refers to reducing greenhouse gas emissions to zero as much as possible, with the remaining emissions being reabsorbed from the atmosphere. (United Nations)

The spread is the difference between the yields on two different bonds.

risk consideration

(Video) How debt capital supports emerging market pioneers to reach transition goals | DCM Deep Dive

Investing in fixed income securities is generally subject to the risks associated with debt securities, including credit, liquidity, interest rate, prepayment and deferment risks. Bond prices change inversely with interest rates. Thus, a general rise in interest rates could lead to lower bond prices. The value of variable and floating rate securities is generally less sensitive to changes in interest rates than fixed rate securities. Floating rate and floating rate securities may lose value if interest rates do not move as expected. In contrast, floating-rate and variable-rate securities typically do not increase in value if market rates fall. Credit risk is the risk of an issuer defaulting on its interest and principal payments. Credit risk is higher when investing in high-yield bonds (also known as junk bonds). Prepayment risk is the risk that the issuer of a security may repay the principal sooner than originally expected. Delay risk is the risk that the issuer of a security may repay principal at a slower rate than originally expected. All fixed income investments may be worth less than their original cost upon redemption or maturity.

An Environmental, Social and Governance (“ESG”) strategy may incorporate risks or eliminate risks found in other strategies or broad market benchmarks that could result in performance that differs from that of these other strategies or benchmarks. market reference. ESG strategies will be influenced by the risks associated with their underlying investment asset classes. In addition, needs within certain markets or industries targeted by ESG strategies may not develop as expected or may develop more slowly than expected.

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(Video) Twelve Capital: financing the transition – sustainable finance in action

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What is the EIB climate Awareness bond 2007? ›

In 2007, the EIB issued its inaugural Climate Awareness Bond (CAB), the world's first green bond. CABs provide clarity and accountability through their dedicated use-of-proceeds. The EIB allocates the funds exclusively to CAB-eligible loan disbursements and reports on both allocated projects and climate impact.

How does a green bond work? ›

Green bonds work just like any other corporate or government bond. Borrowers issue these securities to secure financing for projects that will have a positive environmental impact, such as ecosystem restoration or reducing pollution. Investors who purchase these bonds can expect to make a profit as the bond matures.

Are green bonds good investment? ›

Green bonds can help investors put their money where their values are. Much like investing in environmental, social and governance, or ESG, investments, green bonds have a mission built into the investment itself. Green bonds can also have tax incentives in the form of tax exemption and tax credits.

Who was the first corporate green bond? ›

In late 2007, a group of Swedish pension funds sought to invest in projects that help the climate. Less than a year later, in November 2008, the World Bank became the first institution to issue a green bond, raising funds from fixed-income investors to support lending for eligible climate-focused projects.

What is the purpose of the EIB? ›

The European Investment Bank (EIB) furthers the objectives of the European Union by providing long-term project funding, guarantees and advice. It supports projects both within and outside the EU. Its shareholders are the Member States of the EU.

Is the EIB an investment bank? ›

The EIB is the majority shareholder of the European Investment Fund (EIF), which provides funding to small and medium-sized enterprises (SMEs) through venture capital and risk finance instruments. Other shareholders are the European Commission and financial institutions from across Europe.

Are green bonds fixed income? ›

A green bond is a type of fixed income instrument that specifically and solely dedicates its proceeds to financing new or existing projects that advance environmental objectives.

What is the difference between ESG bonds and green bonds? ›

ESG bonds refer to any bond with set environmental, social, or governance objectives. This can include everything from affordable housing to improved infrastructure, reduction of racial or gender inequity, or renewable energy. Green bonds specifically focus on issues related to the climate and environment.

Do green bonds actually reduce carbon emissions? ›

Green bonds fund projects with clear environmental benefits and, in particular, projects that avoid carbon emissions compared with a conventional approach. Renewable energy, green transport and green buildings make up the bulk of green bond-financed projects.

What are the disadvantages of green bonds? ›

There is a lack of credit rating and rating guidelines for these bonds. Issuers issue these bonds for a longer period say ten years which may fail to offer liquidity to some investors. Also, green projects require a more extended period to deliver returns.

What are the criticism of green bonds? ›

Critics say these bonds do little to address a company's wider environmental impact and can allow some of the biggest players - energy, mining and other natural resource companies - to claim green credentials without fundamentally changing their business models.

What are the arguments against green bonds? ›

However, there remain significant challenges and risks to the continued use and growth of the green bond market. These include inadequate green contractual protection for investors, the quality of reporting metrics and transparency, issuer confusion and fatigue, greenwashing, and pricing.

Who are the biggest green bond issuers? ›

Largest banks' green bonds issuance
  • ICBC (China) 9.8bn USD. Value of green bond issuance of the largest banks worldwide 2020. ...
  • Bank of China (China) 8.7 bn USD. Value of green bond issuance of the largest banks worldwide 2020. ...
  • Bank of America (U.S.) 6.4bn USD. ...
  • ING Group (Netherlands) 4.6 bn EUR. ...
  • Show more facts.
Aug 15, 2022

Who are the biggest buyers of green bonds? ›

Who buys Green Bonds? Green Bond purchasers are typically institutional investors, often with either an ESG (environment, social and governance) mandate or an environmental focus. Other buyers include investment managers, governments and corporate investors.

Who is the world's largest green bond issuer? ›

Internationally aligned green bonds in China more than doubled year over year to US$23.91 billion in the second quarter, cementing China's position as the world's biggest green bond issuer in 2022.

Who funds the European Investment Bank? ›

Shareholders. The European Investment Bank's has capital from its shareholders, the Member States of the European Union. Each Member State is subscribed in capital based on its economic weight (expressed in Gross domestic product) within the European Union at the time of the country's accession to the European Union.

How is the EIB funded? ›

Funding strategy

The EIB acquires the funds for its lending by borrowing on the international capital markets. The EIB's funding is balanced to be responsive to market demand, while also developing and maintaining a strategic presence.

What are all the EIB tasks? ›

The EIB focuses on over 40 individual, procedural tasks. These include day and night land navigation, a 12-mile foot march, and weapon, medical and patrol lanes with 10 stations each, all performed over 5 days by as many as 1,500 Candidates.

Who regulates EIB? ›

Because the EIB is at the same time an EU body and a bank, it is governed by both public governance and cor- porate governance principles. We refer to these as “governance”.

What is the most prestigious investment banking group? ›

Bankers continue to regard Goldman Sachs as the world's most prestigious bank, followed (as always) by Morgan Stanley and JP Morgan. Credit Suisse and UBS lost the most ground in 2022 while LionTree Advisors' reputation improved the most in the eyes of bankers.

What is the total assets of EIB? ›

The EIB is Europe's largest institutional investor in infrastructure with a total loan assets in excess of €400bn and, alongside its subsidiary, the European Investment Fund (EIF), manages participations in more than 600 venture capital and private equity funds both inside and outside the EU totalling €11bn in ...

What is the difference between bonds and fixed income? ›

Fixed income is held for the steady income stream the regular coupon payments provide. Bonds can offer diversification benefits because they often perform in the opposite direction to shares. Bond investments, therefore, help to lower the risk level within a diversified portfolio.

Are US Treasury bonds fixed income? ›

Treasury bonds, Treasury bills, and Treasury notes are all government-issued fixed income securities that are deemed safe and secure.

What is an example of a fixed income bond? ›

Treasury bonds and bills, municipal bonds, corporate bonds, and certificates of deposit (CDs) are all examples of fixed-income products.

What are the largest ESG bond funds? ›

The fund size given is for the 31st January 2021 and denominated in GBP.
  • Royal London Emerging Markets ESG Leaders Equity Tracker Fund. ...
  • BlackRock Global Funds ESG Multi-Asset Fund. ...
  • Federated Hermes Global Equity ESG Fund. ...
  • Vanguard ESG Developed World All Cap Equity Index Fund. ...
  • BlackRock Strategic Funds ESG Euro Bond Fund.

What are the best green bonds? ›

List of Top 5 Green Bond ETFs in 2021
  • Xtrackers EUR Corporate Green Bond UCITS ETF +USD 145 million.
  • iShares Global Green Bond ETF +USD 124 million.
  • Xtrackers USD Corporate Green Bond UCITS ETF +USD 122 million.
  • Lyxor Green Bond UCITS ETF +USD 75 million.
  • Franklin Liberty Euro Green Bond UCITS ETF+USD 66 million.
Jan 26, 2022

What is the difference between a green loan and a sustainability linked loan? ›

The key difference between a green loan and a sustainability linked loan is the use of proceeds. Sustainability linked loans can be used for general corporate purposes whilst the proceeds of a green loan must be used for a specific “green project”.

What gives off the most carbon emissions? ›

The largest source of greenhouse gas emissions from human activities in the United States is from burning fossil fuels for electricity, heat, and transportation.

Are green bonds greenwashing? ›

We show that green bonds have a price premium over conventional bonds when there are information asymmetry, transition risk, and it is costly to engage in greenwashing, that is, false or exaggerated claims of being green. The extent of greenwashing in the market is a function of the green bond premium.

Is CO2 making Earth greener? ›

Green plants grow faster with more CO2. Many also become more drought- resistant because higher CO2 levels allow plants to use water more efficiently. More abundant vegetation from increased CO2 is already apparent.

Which country issues the most green bonds? ›

During 2021, the United States issued the higest amount of green bonds worldwide. Green bonds issued in the U.S. amounted to 81.9 billion U.S. dollars. Second in the ranking came China with 68.1 billion U.S. dollars worth of green bonds issued.

What are the 3 major disadvantages in using bonds for long term financing? ›

Some of the risks include:
  • Credit Risk. Credit risk refers to the possibility of default by the issuer in case of cash-flow problems. ...
  • Event Risk. Issuers may face unforeseeable circumstances that directly affect their financial health or liquidity. ...
  • Reinvestment Risk. Callable bonds are subject to reinvestment risk.

Does the US issue green bonds? ›

In 2020, there were $51 billion in green bonds issued in the United States. Globally, the green bond market has increased by 60% since 2015, reaching $1 trillion in 2020.

Who issues green bonds in China? ›

The People's Bank of China also is encouraging banks to step up their green financing by issuing or investing in more green bonds.

What are the two active ownership strategies for sustainable investing? ›

Actively exercising your rights as a shareholder. The two main ways to do this are voting at shareholder meetings and engaging – having an active dialogue – with investee companies.

What percentage of bonds are green? ›

A market propelled by strong growth in the last 10 years

After stalling in 2020 due to the COVID-19 crisis, green bond issues increased twofold in 2021, making up around 5% of total global bond issues for the year, and are expected to climb even higher in 2022.

Who will benefit from the green bond? ›

Green bonds are issued exclusively to finance projects that positively impact the environment. On the other hand, conventional bonds are primarily issued to finance general projects, general working capital purposes, or refinance existing debt.

What is a major criticism of the Green Revolution? ›

Some have argued that small farmers and landless workers lost out as the Green Revolution spread: Only large farmers could afford the improved seeds and fertilizer; mechanization displaced laborers; and many tenant farmers were evicted by their landlords.

Are green bonds more profitable? ›

Combining financial targets with climate targets can be tricky and critics call the whole equation a myth. Studies show that companies that have taken to green financial instruments, such as green bonds, are more profitable and do less harm to the planet than their counterparts.

Who is the biggest buyer of bonds? ›

Ranked: The World's Top Bond Markets

In 2022, the Federal government paid $534 billion in interest on this debt. China is second, at 16% of the global total. Local commercial banks hold the greatest share of its outstanding bonds, while foreign ownership remains fairly low.

Which is the 2nd largest green bond market in the world? ›

In 2021, the green bond issuance in the United States amounted to 81.9 U.S. dollars, while China came in second with 68.1 billion U.S. dollars worth of green bonds.

Who owns most corporate bonds? ›

Insurers have always been the largest institutional investors of corporate bonds and thus play a central role in corporate funding and investment.

Who actually buys bonds? ›

Broker-dealers are the main buyers and sellers in the secondary market for bonds, and retail investors typically purchase bonds through them, either directly as a client or indirectly through mutual funds and exchange-traded funds.

What are the largest US bond funds? ›

The largest Bond ETF is the Vanguard Total Bond Market ETF BND with $92.49B in assets.

Who has the highest yielding foreign bonds? ›

Countries With The Highest Bond Yields
  • United Mexican States (Mexico) 10 Year Bond Yield as of November 30th, 2022: 9.642% ...
  • Russian Federation. ...
  • Republic of South Africa (RSA) ...
  • Republic of Türkiye. ...
  • Republic of Namibia. ...
  • Republic of Colombia. ...
  • Federative Republic of Brazil. ...
  • Islamic Republic of Pakistan.
Dec 1, 2022

Who invented green bonds? ›

The Origins of Green Bonds

The market began with a climate awareness bond issued by the European Investment Bank in 2007. Since then the World Bank Group has created a notable supply of investable green bonds.

Who verifies green bonds? ›

imug rating is a recognised auditor of Green Bonds and Loans according to ICMA and LMA as well as Climate Bonds Approved Verifier. Our quality management is certified according to ISO 9001, which is unique in our industry.

Who issued the first green bond? ›

This "Climate Awareness Bond" structure was used to fund renewable energy and energy efficiency projects. Afterwards, The World Bank became first in the world to issue a labelled "green bond" in 2008, which followed a conventional "plain vanilla" bond structure, contrary to EIB's equity-linked Climate Awareness Bond.

What is an EIB bond? ›

The EIB issues USD benchmark bonds in SEC registered Global format. Between 25% and 30% of the Bank's funding programme is raised in USD Global format. The Bank provides USD Global benchmarks in a wide range of maturities, ranging from 3 years to 10 years.

What is a climate awareness bond? ›

Like normal bonds, climate bonds can be issued by governments, multi-national banks or corporations and the issuing organization repays the bond and any interest. The main difference is that the funds will be used only for positive climate change or environmental projects.

What is the rating on EIB bonds? ›

EIB bonds are of the highest credit quality as the EIB has a AAA rating from Fitch, Moody's and S&P, the three major credit rating agencies.

What is the climate bonds initiative climate bonds standard? ›

The Climate Bonds Standard is an environmental standard to certify bonds that prioritize projects addressing climate change and to support investors in aligning investments decisions with climate goals.

What is the EIB funding plan 2023? ›

The 2023-2025 plan includes financing targets for the Bank's activities inside the EU, outside the EU under EIB Global, and the EIF. Under the plan, the EIB Group signature target for 2023 stands at EUR 80.4bn and the disbursement target at a range of EUR 47.6bn to EUR 56.1bn.

Who are the shareholders of the EIB? ›

The shareholders of the European Investment Bank are the 27 Member States of the European Union. The EU Member States are fully eligible for financing operations. Each Member State's share in the Bank's capital is based on its economic weight within the European Union (expressed in GDP) at the time of its accession.

What is the difference between transition bonds and green bonds? ›

While green bonds require climate and other environmentally beneficial projects to be identified for financing or refinancing, transition bonds focus on UoP categories that help a company progress towards its decarbonisation goals. In other words, helping companies transition from brown to "less brown" or "greener".

What is grandfathering the green bond standard? ›

Grandfathering. The initial legislative proposal by the Commission included a five year grandfathering period – that is, European green bond issuers would have five years to re-allocate proceeds if there would be changes in the EU taxonomy.

In which two markets are green bonds growing the most? ›

All regions saw a rise in the amount raised by green bonds, with Asia Pacific up 30 percent year-on-year for a 22 percent market share. Europe's dominance of green bonds is driven by France, which accounts for 13.4 percent of the global total, making it the most active issuer nation.

What are the 5 types of bonds? ›

Types of bonds
  • U.S. government bonds and securities. Governments worldwide sell bonds and securities to print money, fund government spending and services and pay down debt. ...
  • Municipal bonds, or munis. ...
  • International and emerging markets bonds. ...
  • Corporate bonds. ...
  • Bond ETFs. ...
  • Green bonds.
Mar 28, 2023

What are the two best known bond rating companies? ›

In the United States, the three primary bond rating agencies are Standard & Poor's Global Ratings, Moody's, and Fitch Ratings. The bond rating agencies provide useful information to the markets and help investors save on research costs.

What is the safest bond rating? ›

For Standard & Poor's, AAA is the best rating, followed by AA, A, BBB, BB, B, CCC, CC, and C. D is used for bonds that are already in default, which means the underlying company isn't able to pay back principal.

What are the three types of sustainability bonds? ›

There are four main categories of sustainable bonds: green, social, sustainability, and sustainability linked.

What are the four pillars of the green bond principles? ›

The Green Bond Principles consist of four components: use of proceeds, process for evaluation and selection, management of proceeds and reporting.

What are the leading climate funds? ›

The Green Climate Fund (GCF) – a critical element of the historic Paris Agreement - is the world's largest climate fund, mandated to support developing countries raise and realize their Nationally Determined Contributions (NDC) ambitions towards low-emissions, climate-resilient pathways.


1. ENGLISH | Day 3 | Session 2 | Big Moves in Transitioning the Financial System
(Climate Bonds Initiative)
2. Climate Transition Finance, 9 December 2020
(The International Capital Market Association)
3. Fix the economy to fix climate change: the role of the circular economy | #COP26
4. A Transition Financing Taxonomy for Canada - Insights from the Global Climate Bond Initiative
(Canada Climate Law Initiative)
(UN Climate Change - Events)
6. 'Bloomberg Surveillance: Early Edition' Full (05/22/23)
(Bloomberg Television)


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