What are the differences between green bonds and sustainable investments?

What are the differences between green bonds and sustainable investments?

Green bonds are specifically used to fund projects with environmental benefits, while sustainable investments encompass a broader range of assets that consider environmental, social, and governance (ESG) factors.

Can you give me examples of each?

Sure! An example of a green bond could be one issued to finance renewable energy projects, like solar farms. A sustainable investment might be a mutual fund that invests in companies with strong ESG practices across various sectors.

Which one is considered better for long-term investment?

It depends on your investment goals. Green bonds can offer stable returns with a focus on environmental impact, while sustainable investments may provide broader diversification and potential for growth across various sectors.

Are there any risks associated with these investments?

Yes, both types of investments carry risks. Green bonds may be subject to project-specific risks, while sustainable investments can be affected by market volatility and the performance of the underlying companies.