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What are the Green bond Principles?

As the market grew rapidly, market players have sought to bring greater clarity to the definitions and processes associated with green bonds. Using the experiences of the multilateral development banks, in early 2014, —a group of banks initiated the development of the Green Bond Principles (GBP)—a set of voluntary guidelines framing the issuance of green bonds. (“Green Bond Principles.” International Capital Market Association March 2015).

In a second edition published in March 2015, the GBP encourage transparency, disclosure, and integrity in the development of the green bond market. The GBP suggest a process for designating, disclosing, managing, and reporting on the proceeds of the bond. They are designed to provide issuers with guidance on the key components involved in launching a green bond, including providing information to aid investors in evaluating the environmental impact of their green bond investments. The International Capital Markets Association acts as the GBP's secretariat and facilitates the work of its members, including issuers, investors, banks underwriting green bonds, and other market participants.

The GBP recognize several broad categories of potential eligible projects, which include but are not limited to the following:

  • Renewable energy
  • Energy efficiency (including efficient buildings)
  • Sustainable waste management
  • Sustainable land use (including sustainable forestry and agriculture)
  • Biodiversity conservation
  • Clean transportation
  • Sustainable water management (including clean and/or drinking water)
  • Climate change adaptation