The $280 Billion Climate Bond Market That Isn’t Working
Sustainability-linked bonds are supposed to provide incentives for issuers to achieve set green targets. The reality is altogether different, research shows.
The sustainability-linked bond (SLB) market is accessible to heavy polluters like cement producers and steel manufacturers that might otherwise struggle to identify projects eligible for green bonds. But there are significant problems with SLB design and execution.
Photographer: Philippe Huguen/AFPOne of Wall Street’s favorite financial innovations for helping reduce corporate greenhouse gas emissions isn’t functioning as intended.
That’s according to new research from the investor-focused nonprofit Climate Bonds Initiative (CBI). The group’s study found that more than 80% of 768 sustainability-linked bonds issued from 2018 through November of last year aren’t aligned with global climate goals.