How are green bonds regulated?

What are green bonds and how do they work?

Green bonds are fixed-income instruments designed to raise funds for projects with positive environmental impacts. They work like traditional bonds but are specifically earmarked for financing green projects.

How are these green bonds regulated?

Green bonds are regulated by various frameworks, including the Green Bond Principles, which provide guidelines for issuance, and national regulations that may apply depending on the jurisdiction.

Are there any specific standards that issuers must follow?

Yes, issuers often follow standards like the Climate Bonds Standard or the International Capital Market Association's Green Bond Principles to ensure transparency and accountability.

What happens if a project funded by green bonds fails to meet its environmental goals?

If a project fails to meet its goals, it can lead to reputational damage for the issuer and potential financial consequences, as investors may seek accountability.