"Green Bonds" Continue to Encourage Australia's Environmental Investment
Green Bonds are similar to regular bonds, but they require the issuer to invest the funds in an environmentally friendly way. Australia has seen a dramatic increase in the issuance of Green Bonds since 2014 and it won't be stopping anytime soon.
Businesses around the country are obtaining capital from investors who also believe in renewable energy sourcing --we've seen this with the tremendous success of Clear Sky Solar and the range of community-funded projects we have supported. Green Bonds are another path to assure the investor that their money is funding projects like commercial solar, helping the environment while delivering healthy returns.
Here is an excerpt from the article.
Green bonds function just like normal corporate or government bonds, but the issuer has to promise to use the funds to fund some type of environmentally beneficial development. This investment doesn't have to sustain a commercial rate of return itself – if the bond is instead underwritten by the total balance sheet of the issuer, it shares the issuers' credit rating. Because of this, green bonds typically have identical yields to equivalent regular bonds.
Between 2014 and 2016, the total amount of money put in funds with some social or green investment principles grew from $US148 billion to $US516 billion across Australia and New Zealand, according to the Global Sustainable Investment Review, released in March.