Green Bonds as an Instrument of Sustainable Financing – Rationale and Prospects for Development

Abstract

Goal – Showing the specifics, rationale and prospects for the development of green bonds. This is currently an important issue that arises from the implementation of the climate policy goals set out in the Paris Agreement. Ensuring the financing of investments necessary to achieve climate goals requires the use of sustainable financial instruments, such as debt securities, especially green bonds. Research methodology – The article uses research methods such as literature studies on the subject, as well as content analysis of reports and statistics on sustainable financing issues. Score/results – The conducted research indicates that green bonds are becoming an increasingly popular form of debt financing for sustainable development projects. Funds raised from their issuance are used for renewable energy, energy efficiency, zero-emission transportation, or “green” buildings. They help transform countries’ economies toward climate neutrality and resource efficiency. Forecasts indicate that demand for these financial instruments will continue to grow as investors seek to align their portfolios with sustainability goals. Originality/value – The article has cognitive value regarding the rationale and prospects for the development of green bonds, which are the main instrument of debt financing for sustainable development.