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How the $1 trillion green bond market works

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So-called green bonds have become more popular in recent years, and this fast-growing segment of the $128.3 trillion global bond market could grow even more. Watch this video to learn more about how green bonds work, how issuers can be held accountable and how green bonds can move capital toward climate-friendly projects and goals.

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The case for Green Investment

Green investment. Impact investment. Sustainable investment. The core idea is the same: leverage vast amounts of wealth to protect people, animals and the planet.

Green investment is critical to addressing the urgent challenge of climate change and creating a sustainable future for our planet. By investing in renewable energy, energy efficiency, sustainable transportation, and other green technologies, we can reduce our reliance on fossil fuels and mitigate the harmful effects of climate change. Green investment also creates jobs, boosts economic growth, and supports innovation. As more governments, businesses, and individuals prioritize green investment, we can accelerate the transition to a low-carbon economy and unlock new opportunities for sustainable development. Ultimately, green investment is crucial for preserving our planet's natural resources and ensuring a livable future for generations to come.

Growing Impact

Impact investing in private markets could be as large as $2.1 trillion in assets under management, but only a quarter of that, $505 billion, is clearly measured for its impact, both for development impact and financial returns, according to a report.

There is and will be a growing focus on diversity equity and inclusion, as many impact funds seek to support diverse entrepreneurs who are also working on inequality and the racial wealth gap. More funds will be allocated to support women and minority homeowners or business owners, as well as people outside of cities.

Investment will continue to grow in climate mitigation, adaptation, and carbon sequestration.

Green Bonds

One environmentally friendly financial instrument that has grown in popularity are green bonds.

Green bonds are a type of fixed-income financial instrument that are designed to fund projects with environmental benefits. The proceeds from these bonds are used to finance projects that promote sustainability and mitigate climate change, such as renewable energy, energy efficiency, sustainable agriculture, and clean transportation. Green bonds are typically issued by governments, corporations, and other organizations that are committed to promoting sustainable development. These bonds offer investors an opportunity to support environmentally-friendly projects while also providing a reliable return on investment. The popularity of green bonds has grown in recent years as investors increasingly seek out socially responsible investments that align with their values.

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