Unmet Expectations in the Climate Bond Market

Unmet Expectations in the Climate Bond Market

By
Lars Johansson
1 min read

Sustainability-linked bonds were designed to incentivize issuers to meet green targets, but recent research by the Climate Bonds Initiative highlights glaring inefficiencies. The study found that over 80% of issued sustainability-linked bonds do not align with global climate goals. This raises questions about the effectiveness of this financial innovation in reducing corporate greenhouse gas emissions. The sustainability-linked bond market, while opening opportunities for heavy polluters, is facing significant challenges in its design and execution. The market's flaws come to light, indicating a need for reevaluation to fulfill its intended purpose.

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