Behind the green bond boom

More entities are looking to green bonds to fund sustainable projects, and demand from investors is keeping pace. The upshot: Returns keep pace as well. Companies, municipalities and countries are getting serious about building a low-carbon future, and they’re increasingly using green bonds to finance climate-friendly projects. Green bond issuance doubled between 2015 and 2016 to $81 billion, and that number is on track to double again by the end of 2017.

This is likely just the beginning of what promises to be a burgeoning asset class, as governments and other entities will need to invest an estimated $90 trillion in infrastructure over the next 15 years to achieve goals outlined by the Global Commission on Economy and Climate. “Green bonds will be a key tool for getting there,” says Jessica Alsford, Head of Morgan Stanley’s Global Sustainability Research team.

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