Green Bonds are bond issued by national or supranational financial institutions, such as the World Bank and the ECB, or by private companies such as the Acea Group.
Green Bonds are among the instruments adopted by ethical and sustainable finance. They differ from traditional bond issuances because the funds they raise are destined exclusively to fund green projects that have a positive impact on the environment and society. For example, Green Bonds are used to fund investments that contribute to fighting against climate change, to developing a circular economy, and to protecting the environment and natural resources.
These are the 4 guidelines that must be followed by anyone who wants to issue Green Bonds:
- specifically indicating how proceeds from the issuance will be used;
- following specific procedures to select ethical finance projects;
- transparently communicating to investors how funds will be used by publishing a green financing framework certified by an independent party;
- providing regular reports to update investors on the progress of the green projects and the impacts produced.