From Grass to Mass: An Index-Based Approach to Measuring Greenium in Green Bonds

Green bonds are tied to specific environmentally friendly projects of an issuer. The borrower agrees that the use of proceeds will be invested in environmentally friendly projects such as alternative clean energy, low carbon assets (e.g., green buildings, factories, or vehicles), or sustainable usage of water, pollution, or natural resources. 

In exchange for this commitment, the issuer seeks economic benefit in the form of a lower borrowing cost. First tapped by supranational borrowers such as the European Investment Bank and the World Bank, the index market value of green bonds surpassed USD 1 trillion in September 2021, expanding from sovereign and quasi-sovereign bonds to corporate and securitized debt.

You can now read the full whitepaper at the link below