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Green Bonds Emerge As Frontrunner

Green bonds are emerging as a frontrunner to fund environmental investment and have garnered a considerable amount of attention from both investors and environmentalists, says a TD Economics report. ‘Green Bonds: Victory Bonds for the Environment’ says there is a desperate need for funding of environmental initiatives and the reality is that governments around the world lack the financial resources to meet all of the current and future requirements. The natural solution is to attract private sector investment into environmental initiatives and one way to accomplish this is to issue debt instruments, particularly bonds, with the raised capital dedicated to the initiative. “Green bonds are like victory bonds for the environment,” says Craig Alexander, senior vice-president and chief economist for TD Bank. “With their exclusive focus on supporting green initiatives, they are a good way to secure large amounts of capital to support many different environmental investments.” Institutional investors – such as pension funds, mutual funds, insurance companies, and sovereign wealth funds – are the natural market for green bonds. These investors hold about 72 per cent of long-term investment in the global bond market and have significant portfolio requirements for fixed income investments. The report is at Green Bonds

Courtesy of Benefits and Pensions Monitor website News Alerts

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