Green bonds

Definition

What is a Green Bond?

A green bond is a debt security—generally issued by a corporation—designed to finance projects that contribute exclusively to environmental objectives (e.g., renewable energy, sustainable water and land management, circular economy initiatives, climate adaptation infrastructure, etc.). These bonds adhere to international standards such as the ICMA Green Bond Principles and, in Europe, the forthcoming EU Green Bond Standard.

Key characteristics:

• Alignment with the EU Taxonomy: projects must comply with one of the six environmental objectives.

• Transparency: detailed disclosure on the use of proceeds and annual reporting.

• External verification: certification by an independent third party reviewer.

• Supervision: oversight by European authorities to ensure full compliance.

• Purpose : To channel capital toward the ecological transition, strengthen investor confidence, and contribute to achieving carbon neutrality.