The Coming Backlash to 'Greenwashing' of Bonds

So-called green bonds, which raise money for environmentally friendly purposes, have exploded in popularity in recent years. So have concerns about "greenwashing," or making misleading claims about just how good an environmental friend the seller is. The European Union has signaled that it may step in to oversee the market, using tools such as mandatory product labels to bring greater clarity to investors.

Green bonds accounted for less than 0.6 percent of global bond sales last year, data compiled by Bloomberg show, but they’re growing fast. About $95 billion worth of green bonds were issued in 2016, twice as much as in 2015, according to Bloomberg New Energy Finance.