Green bond and Sustainability: Difference between pages

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A green bond is not a particularly tightly defined term, but is generally thought of as a fixed income instrument launched to fund specific environmental or green projects such as projects to reduce CO2 emissions.
Sustainability considers the long term environmental and other effects of an organisation's activities, seeking to ensure that they do not degrade the physical environment or other necessary conditions for well being.


The amounts issued have grown rapidly, according to information collated by the Climate Bonds Initiative, a non profit organisation established in 2010. However, total amounts issued remain a relatively small proportion of total bond issuance.
Sustainability has a number of important dimensions in treasury and finance, including environmental sustainability, financial sustainability and social sustainability.


Guidelines for green bonds, the Green Bond Principles, have been issued by a group of 25 leading banks, coordinated by the ICMA ([[International Capital Market Association]]), to establish a voluntary framework for these instruments.


'''''Environmental''''' sustainability involves making decisions and taking actions which expressly take responsibility for the impact on the environment, and avoid depleting or degrading natural resources such as soil, water, forests, and biological diversity.


Green bonds are also sometimes known as 'ESG' (Environmental, Social and Governance) bonds.
 
'''''Financial''''' sustainability is achieved when an organisation is able to earn reliable financial surpluses and generate cash in the medium and longer-term.
 
Financial sustainability includes the ability to pay back borrowings over time, with interest, while maintaining necessary levels of internal investment.
 
 
'''''Social''''' sustainability seeks to identify and manage the impact of business and other activities on people. For example, employees, customers, suppliers, others employed by customers and suppliers, and host communities.
 
 
Historically, it was often considered that there was a conflict between environmental sustainability and financial sustainability.
 
More recently, an increasingly mainstream view is that it is only environmentally sustainable businesses which are fully financially sustainable.
 
This view suggests that there need be no conflict between an organisation’s environmental and financial objectives, when a sufficiently long-term view is taken.
 
 
Sustainability is increasingly being used as a component in borrowings and credit evaluation.
 
Credit rating agencies are also taking sustainability principles into account.
 
 
<span style="color:#4B0082">'''''Credit ratings and ESG'''''</span>
 
:"The European Commission’s Sustainable Finance High-Level Expert Group (HLEG) says that credit rating agencies should “systematically integrate” relevant environmental, social and governance (ESG) criteria into their credit-rating analyses, along with factors related to longer-term sustainability..."
 
:''The Treasurer, web exclusive, June 2019.''




== See also ==
== See also ==
* [[Accounting for Sustainability]] (A4S)
* [[B Corporation]]
* [[Bottom line]]
* [[Business & Sustainable Development Commission]]
* [[Carbon footprint]]
* [[Climate benchmark]]
* [[Corporate social responsibility]]
* [[Credit]]
* [[Credit rating agency]]
* [[Environmental profit and loss]]
* [[ESG investment]]
* [[ESG investment]]
* [[Fixed income]]
* [[Fiduciary duty]]
* [[Forum for the Future]]
* [[Global Sustainable Investment Alliance]]
* [[HLEG]]
* [[Metaeconomics]]
* [[Moratorium]]
* [[Natural capital]]
* [[Organic]]
* [[Reputational risk]]
* [[Return on Sustainability Investment]]
* [[SRA]]
* [[SRI]]
* [[Stakeholder]]
* [[Stewardship]]
* [[Sustainability reporting]]
* [[Sustainability Accounting Standards Board]]
* [[Sustainability bond]]
* [[Sustainability bond]]
* [[Greenwash]]
* [[Sustainability Linked Loan Principles]]
 
* [[Sustainable Development Goals]]
 
* [[Sustainable finance]]
===Other links===
* [[Sustainable Finance Disclosure Regulation]] (SFDR)
[http://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/green-bonds/governance-framework/ Green Bond Principles]
* [[Technical Expert Group]]
* [[Triple bottom line]]
* [[UK Sustainable Investment and Finance Association]]


[http://www.ft.com/cms/s/0/42ad7b66-e64e-11e3-bbf5-00144feabdc0.html#axzz330jqfNJo Green bond credentials under scrutiny]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Ethics]]
[[Category:Manage_risks]]
[[Category:Risk_reporting]]

Revision as of 00:55, 7 August 2021

Sustainability considers the long term environmental and other effects of an organisation's activities, seeking to ensure that they do not degrade the physical environment or other necessary conditions for well being.

Sustainability has a number of important dimensions in treasury and finance, including environmental sustainability, financial sustainability and social sustainability.


Environmental sustainability involves making decisions and taking actions which expressly take responsibility for the impact on the environment, and avoid depleting or degrading natural resources such as soil, water, forests, and biological diversity.


Financial sustainability is achieved when an organisation is able to earn reliable financial surpluses and generate cash in the medium and longer-term.

Financial sustainability includes the ability to pay back borrowings over time, with interest, while maintaining necessary levels of internal investment.


Social sustainability seeks to identify and manage the impact of business and other activities on people. For example, employees, customers, suppliers, others employed by customers and suppliers, and host communities.


Historically, it was often considered that there was a conflict between environmental sustainability and financial sustainability.

More recently, an increasingly mainstream view is that it is only environmentally sustainable businesses which are fully financially sustainable.

This view suggests that there need be no conflict between an organisation’s environmental and financial objectives, when a sufficiently long-term view is taken.


Sustainability is increasingly being used as a component in borrowings and credit evaluation.

Credit rating agencies are also taking sustainability principles into account.


Credit ratings and ESG

"The European Commission’s Sustainable Finance High-Level Expert Group (HLEG) says that credit rating agencies should “systematically integrate” relevant environmental, social and governance (ESG) criteria into their credit-rating analyses, along with factors related to longer-term sustainability..."
The Treasurer, web exclusive, June 2019.


See also

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