Did You Know? Green Bonds in 2 Minutes | Asian Development Bank

Did You Know? Green Bonds in 2 Minutes

Video | 1 July 2015

New financial products are providing innovative ways to combat climate change. Green bonds give investors the opportunity to invest in activities that provide a steady return and help the planet at the same time.

Transcript

Title: Did You Know? Green Bonds in 2 Minutes

Description: New financial products are providing innovative ways to combat climate change. Green bonds give investors the opportunity to invest in activities that provide a steady return and help the planet at the same time.

Climate change is one of the biggest challenges of the 21st century. Climate scientists agree that limiting CO2 emissions is essential to reduce temperature rises from reaching unsustainable levels.

Governments, communities, and individuals need to do their part to address climate change. Now, a new financial product is making it easier for companies and investors to do their part.

Introducing the green bond.

Green bonds work a lot like regular bonds. A company or government issues a bond, or a promise to repay at a future date - with interest - in exchange for money that can be used today to invest in income-generating activities. Green bonds work the same way, but instead of investing in any activity, they only fund businesses or projects that are green.

For example, a company might issue a green bond to finance the latest solar power plant, clean technology investments, or climate adaptation projects.

The market for green bonds has been growing rapidly, as investors around the world look to invest their money responsibly. Likewise, companies are seeing the benefits, as green bonds offer a way to finance projects that might otherwise be difficult to finance.

Countries in Asia and the Pacific have been leading the way in technology that can help the planet.

But, Asia still lags in the issuance of green bonds. Green bond financing can attract new types of investors that are looking at the long term.

Governments and companies across the region will need to make a concerted effort to address climate change. Green bonds will increasingly be part of the solution.