Annual issuance of “green bonds,” financing instruments connected to business activities with positive environmental effects, have gone from non-existent in 2007 to greater than $250 billion (equivalent) in 2019, using the most conservative estimates.

The rapid growth in this market has been driven by investor interest rather than by regulatory incentives, and governments have stayed on the sidelines for the most part. Without a central, government-mandated regime for certifying a bond as green, market participants have developed alternative means to validate issuers’ labeling of bonds as green.

Originally published in Bloomberg Law - April 2020.