Is paying a ‘greenium’ worth it when it comes to the bond market?
By Sandra O’Connell, The Irish Times
Greenwashing can be a problem with green bonds, says Dr Fabiola Schneider, assistant professor in accountancy at UCD
Green bonds are a mighty tool with which to drive environmentally friendly activities. But there are challenges too.
The term refers to any type of bond instrument where the proceeds are used to finance or refinance new and existing projects with environmental benefits.
“If a company issues a green bond the proceeds must be invested in environmentally beneficial projects. So, for example, they could use the proceeds to invest in wind farms, or solar,” explains Shane O’Neill, head of debt advisory at Davy Corporate Finance....
...As such, the stage is set for expansion. But the fact that the use of green bond proceeds is tied to specific environmentally friendly activities, and as such does not constitute general financing, will remain a disincentive for some, according to Fabiola Schneider, assistant professor in accountancy at University College Dublin.
Read the full article here - published first in The Irish Times on March 15th, 2024.
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