What is the difference between green bonds and sustainable bonds?

Can you explain the difference between green bonds and sustainable bonds?

Sure! Green bonds are specifically used to fund projects that have positive environmental impacts, like renewable energy. Sustainable bonds, on the other hand, can finance a broader range of projects that meet sustainability criteria, including social and governance aspects.

Are there specific criteria that define these bonds?

Yes, green bonds typically follow guidelines set by organizations like the Green Bond Principles, focusing on environmental benefits. Sustainable bonds may adhere to the Sustainability Bond Guidelines, which encompass environmental, social, and governance factors.

Which type of bond is more popular among investors?

Green bonds have gained significant popularity in recent years, especially among environmentally conscious investors. However, sustainable bonds are also growing in demand as they appeal to a wider range of investment strategies.

Can you give examples of projects funded by each type?

Certainly! Green bonds often fund solar or wind energy projects, while sustainable bonds might finance affordable housing or education initiatives that also consider environmental impacts.