Why is it so important to know how green a bond is? Our climate podcast green finance episode explains this is crucial to the fight against climate change


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Any kid with a paint set knows there are lots of different shades of green. So if I try to sell you a “green bond” to help fight climate change, can you know how green it really is?

Our climate podcast green finance episode will tell you how big institutions have figured out a set of rules to make sure that you—or the pension fund or bank that buys them for you—will be able to tell just how green your green bond is.

That’s more important than it might sound. Because fighting climate change is a lot of things—it’s urgent, it’s crucial to the survival of humanity, and it’s really, really expensive.

If we’re going to hit our climate targets, we need to invest trillions of euros in renewable energy and energy efficiency, in adaptation projects that protect us from the impact climate change is already having—and we need to develop new technologies that none of us have even thought of yet.

All this costs a lot of money, and we won’t raise that money unless we can demonstrate to investors that it’s being spent on climate projects with a real impact. That’s what you’ll find out about on our climate podcast green finance episode.

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In the climate podcast green finance episode, you’ll find out:

  • What are green bonds? Green bonds are bonds whose proceeds are allocated to renewable energy and energy efficiency projects.
  • Before we get to green bonds, we’ll also explain what bonds are. A bond is a financial instrument that’s sold by a company or an institution or even a country. The investor buys the bonds, because the issuer—the seller of the bond—agrees to pay back the investor’s money plus interest at a set time in the future. Green bonds do all this, but with a cool twist.
  • What is a sustainability awareness bond? Sustainability Awareness Bonds are financial bonds whose proceeds go to projects that contribute to sustainability objectives, beyond climate change mitigation (because mitigation is for green bonds). Sustainability awareness bonds deal with other issues related to the environment.

If you’ve got something to say about climate in general or this podcast in particular, let me know @EIBMatt on Twitter. And don’t forget to subscribe to Climate Solutions.