The Climate Investor’s Evolving Toolkit: Are Green Bonds Today “2C” Investments or Merely “Greenwashed” Fixed Income?

In the last 3 years, the labeled green bond market has seen tremendous growth and has emerged as a viable option in the global transition to a low-carbon world.  As a subset of the broader $0.6 tn identified unlabeled sustainable and climate bond universe, with approx. $80 bn in outstandings, the green bond universe is almost negligible as a share of the approx. $100 tn fixed income market. However, it has the potential to grow dramatically, and to be a source of vast amounts of capital necessary to keep the world on a 2 degree C (2C)  pathway, especially given the diversity of issuer and investor types and the range of associated investment strategies.

Whether the green bond market can meet the urgency of directing investments to keep us on a 2C pathway is still far from clear, given the current evolving nature of market standards related to disclosure, definition of greenness, climate impact reporting and overall best practices. 

Can green bonds be a potent decarbonization investment alternative for institutional investor portfolios, while also contributing to investment flows required to meet the pace of investments required for low carbon transition? As an investment option, how does it compare then, in terms of risk/return and cost of access, and can it be a complement to other decarbonization investment alternatives such as low-carbon equity (listed/unlisted; and passive/active strategies)?  If these considerations, are addressed by market participants, then green fixed income instruments have the potential to direct trillions of investment flows needed for transitioning to a 2C low-carbon world.  

Join the Yale Center for Business and the Environment for an engaging discussion on sustainability metrics with Anadi Jauhari (MBA '90) and Jacob Galardi from Emerging Energy and Environment Investment Group (EEEIG).

Lunch will be served. Please register so that we may provide enough food and seating.

About the series:

Sustainability metrics is a work in progress, but solutions are beginning to emerge. This series brings to campus practitioners who are working to overcome challenges and create systems to develop comparable metrics within and across sectors.

This event is co-hosted with the Yale Center for Environmental Law and Policy.