Green Bonds and Beyond: Debt Financing As a Sustainability Driver
In Beate Sjåfjell and Christopher M. Bruner (eds), Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability (Cambridge University Press, Forthcoming).
Posted: 8 May 2019 Last revised: 4 Nov 2019
Date Written: May 6, 2019
This chapter addresses debt-based investing as a driver for global sustainability. Loans, bonds, and other forms of debt constitute a substantial proportion of the capital that corporations use to finance their operations and offer a distinct set of legal tools to influence corporate conduct. Drawing on corporate law and financial regulation scholarship, this chapter explores the regulatory and corporate governance issues arising from green bonds. Green bonds, along with social bonds and sustainability bonds, enable issuers to use the proceeds from their sale to finance projects, assets, or business activities with environmental, social, or economic objectives. This chapter examines the private standards, certification schemes, indices, and assurance practices and government-based regulatory frameworks in the green bond market. To prevent greenwashing and ensure the continued growth of this market, this chapter proposes reforms to corporate governance practices to enhance the monitoring and control powers of green bond investors.
Keywords: sustainability bonds, sustainable finance, impact investing, ESG
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