The bond villains of green investment: why an unregulated securities market needs government to lay down the law

Abstract

the bond villains of green investment: why an unregulated securities market needs government to lay down the law cristina m. banahan*† abstract green bonds are widely regarded as being part of the solution to the massive amount of investment needed to address climate change. green bonds function largely like regular bonds, except that they have a dual purpose of achieving an environmental goal in addition to the financial gains. the sector remains, however, broadly unregulated, leading to questionable funding of projects under the premise of being “green” bonds. this article provides an introduction into the nascent green bond industry and the current regulatory regimes in place. furthermore, this article argues that the regulations currently in place are insufficient to create the market stability necessary to grow green investments quickly enough to address the challenges presented by climate change. to successfully grow the green bond market to finance climate action, stakeholders must learn the lessons offered by the 2008 financial crisis and problematic green bond issuances to date. to implement the lessons learned by the financial crisis and problematic bond issuances, this article covers the benefits to be gained from a regulatory body that ensures the environmental integrity of green investments. abstract ..................................................................................................841 …

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