Green Bond

A bond whose proceeds are earmarked for environmental projects.

A green bond is ordinary debt with a pledge attached: the money raised funds environmentally beneficial projects — renewable energy, clean transit, efficient buildings. The market grew from the first issues by development banks in 2007–08 to hundreds of billions in annual issuance, as institutional investors sought climate-aligned assets. Because the pledge is largely self-certified, standards bodies and second opinions police 'greenwashing' — the risk that the label outruns the reality of what the money funds.

The utility financed its solar farms with a green bond that drew orders from climate-focused pension funds.