The concept of green bonds in the global finance ecosystem is fast catching up. Green bonds valued at $106.86 billion were issued in just the first quarter of 2021, according to a report published by the British non-profit Climate Bonds Initiative.
A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.
The issuance of green bonds across the world rose to a record high of $269.5 billion in 2020 (60 percent growth rate since 2015) despite COVID-19, as per the Climate Bonds Initiative report. It crossed the $1-trillion milestone in 2020 and is estimated to grow to $2.36 trillion by 2023, the report said.
Britain’s finance minister Rishi Sunak is expected to announce plans for 15-billion pounds ($21 billion) green savings bonds this fiscal. This is likely to be the most ambitious green sovereign bond issue planned by any country of a similar stature, reported Reuters.
With the US back to supporting the Paris Agreement under President Joe Biden, many countries are renewing their pledges to meet climate risk mitigation and sustainability goals.
Countries such as the UK, China, Kazakhstan and Uzbekistan are seeing investors backing 'green finance' initiatives.
Regulators across the globe too believe that sustainable or green financing is the way forward.
As Japan aims to achieve a target of carbon neutrality by 2050, its central bank launched its first green investment fund in June 2021.
Green finance refers to capital (in the form of debt instruments, equity investments or loans, etc) backing businesses or ventures which help to obtain specific clean environmental outcomes.
In September 2020, Climate Action 100+, an initiative supported by 500 plus global institutional investor groups managing over $47 trillion in assets, gave notice to 161 mining, transport and other sector companies using fossil fuels.
India’s richest man Mukesh Ambani, while speaking at the Qatar Economic Forum, said there is no option but for businesses to adopt a sustainable business model by embracing
clean energy, reports PTI.
Ambani discussed his plans to transform each of the units under the Reliance Group behemoth in order to achieve a target of net carbon-zero emissions by 2035. The Reliance Group is expected to have earmarked a budget Rs 750 billion (Rs 75,000 crore) with respect to its carbon-zero aim.
The Adani Group aspires to add 5GW green energy a year for the next 10 years to become the world’s largest solar power company and help India to become one of the world's largest renewable energy producers, said a letter to Adani Enterprises investors.
(Edited by : Shoma Bhattacharjee)
