Sustainability Bonds

ESG
:   
Financing
April 17, 2023

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.

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Financing

Sustainability-linked Bonds

Sustainability-linked bonds are structured so that the issuer is incentivized to meet certain sustainability performance targets, such as reducing greenhouse gas emissions, improving worker safety, or increasing renewable energy usage.
Financing

Texas’s 2021 Anti-ESG Law

Texas’s 2021 Anti-ESG Law and 2022 Blacklist refer to legislative and regulatory actions taken by the state of Texas to counteract what it views as discriminatory practices against the oil and gas industry by financial institutions that follow environmental, social, and governance (ESG) principles.
Financing

Final Investment Decision (FID)

FID stands for Final Investment Decision. It's a key phase in the capital project planning process when the decision to make major financial commitments is taken. In energy, FID is the final step in determining whether to move forward with the construction of an infrastructure project. In exploration, FID costs are those directly related to the discovery of oil or another commodity.