Sustainability bonds are a type of bond that finance projects with a positive environmental or social impact. These bonds are issued by governments, companies, and other organizations to fund projects related to sustainability, such as renewable energy, clean water, or affordable housing.
The proceeds from sustainability bonds are earmarked for specific projects or activities that meet predefined sustainability criteria. The bond issuer typically reports on the environmental and social impact of the projects funded by the bond.
Sustainability bonds are similar to green bonds, but they have a broader scope, as they may finance projects beyond just environmental initiatives. For example, sustainability bonds may also fund projects related to social issues, such as healthcare, education, or community development.
Sustainability bonds have gained popularity in recent years as investors seek to support sustainable initiatives and as companies and governments increasingly focus on ESG (environmental, social, and governance) considerations in their operations.
The ESG space is changing day by day, creating more uncertainty for decision makers
