The market for green bonds is growing exponentially.Green bonds must have a positive environmental impact.Governments and companies use the securities to finance major sustainability projects.Efforts are accelerating to prevent misleading marketing known as greenwashing

Tackling the climate crisis won’t come cheap. The United Nations’ Intergovernmental Panel on Climate Change estimates that limiting the temperature increase to 2C, the goal of the Paris Agreement, will require about $3 trillion of investment every year to 2050.

To raise those vast sums, governments and corporations are increasingly turning to green bonds.

Green bonds work like regular bonds with one key difference: the money raised from investors is used exclusively to finance projects that have a positive environmental impact, such as renewable energy and green buildings.

With countries around the world stepping up their efforts to reduce carbon emissions, the market for green bonds is booming. This rapid growth was highlighted in October 2021, when the European Union issued about $14 billion of the bonds – the largest deal ever. The money raised will support projects including a research platform for energy transition in Belgium and wind power plants in Lithuania.

Volume green bonds, Europe.