Bonos climáticos para principiantes

A brief guide to understanding what climate bonds are and why they are important.

What is a green bond and is it the same as a Climate Bond?

A green bond is where the proceeds are allocated to environmental projects. The term generally refers to bonds that have been marketed as “green”.

In theory, the proceeds of green bonds could be used for a wide variety of environmental projects, or even for park development; but in practice they have been mostly the same as climate bonds, with the proceeds going to climate change projects.

In some cases, a portion of the proceeds went to areas considered environmental but not necessarily related to climate change. For example, proceeds from RaboBank’s green retail bonds in the Netherlands can go to organic agricultural lending, as well as to climate change-related areas such as sustainable buildings.

Who issues these bonds?

Mostly corporations and companies, some from multilateral development banks and some from asset-backed bonds.

Pioneer issuers of green or “labeled” climate bonds, where proceeds are allocated to climate projects, have been the World Bank and its sister organization, the International Finance Corporation, with its Green Bonds, and the European Investment Bank, with its Climate Consciousness. In the case of LATAM, corporations such as CMI Capital, the pride of the Bosch Gutiérrez family, has launched the issuance of these bonds.

Who buys climate bonds?

The vast majority of climate bonds have been bought by institutional investors such as pension funds and fund managers. In the Netherlands and South Africa, banks have also offered green bonds to individuals; and some fund managers, using World Green Bonds, have set up special funds in which individuals can invest.

How big is the climate bond market?

The green/climate bond market includes all bonds that have been issued to help finance climate-friendly projects. Currently, the climate bond market is worth an estimated $346 billion.

There are about $50 billion outstanding of labeled climate bonds and green bonds (as of October 2014).

What are the benefits of green bonds?

They offer the same yields as other bonds, but with the added benefit that the funds are only earmarked for climate change solutions. For many people, such as the $22 billion investors who are members of the Investors on Climate Change coalition, this is important.

They give investors the opportunity to direct capital to climate change solutions, where there are few opportunities right now (“lack of deal flow”).

Climate bonds meet the needs of issuers, bondholders and the environment.

What is the Climate Bonds Initiative and what does it do?

The Climate Bonds Initiative is an international non-profit organization that promotes the development of climate bonds. It aims to raise awareness of the existence and benefits of climate bonds and promote investments in them; it proposes standards that establish what a green bond is, helping to identify and label green bonds so that they can be recognized as such; and it develops model projects in areas where climate change is a problem.


You may also be interested in: Latin America in Green Bonds

Carla Fowler

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