Green bonds – these finance positive environmental and/or climate projects. Four components of green bonds are:

1. Use of proceeds towards clear environmental objectives.
2. Process for project evaluation and selection.
3. Management of proceeds to ensure their correct use.
4. Reporting to update investors on the expected environmental impact of projects.

There are no universally recognised standards for green bonds, so investors should undertake proper impact due diligence on projects and issuers. Look for independent verification where possible.

Read our other definitions
A for Additionality
B for Blended finance 
C for Concessionary 
D for Double materiality 
E for ESG
F for Fiduciary duty
H for Hydrogen
I for Intentionality
J for Just transition
K for Key performance indicators
L for Low carbon 
M for Measurement
N for Natural capital
O for Outcomes 
P for Paris Agreement
Q for Qualitative Impact Assessment Protocol
R for Responsible investment
S for Sustainable development goals
T for Triple bottom line
U for Underserved communities
V for Vocational training
W for Water access
X for Xeriscaping
Y for Youth empowerment 
Z for Zero-waste strategy