CHAPTER 12

Green, Social and Sustainability Bonds

Fixed income with a purpose

Opening question

“Is a green bond safer, cheaper or simply a label?”

In this chapter

Use-of-proceeds bonds: green, social and sustainability bonds and the principles behind them
Eligible projects and the four core components of a credible framework
Why a green bond usually carries the same credit risk as the issuer's other bonds
Sustainability-linked bonds and loans, with a worked example of a coupon step-up
The "greenium": how to measure it, with a worked example, and what studies find
Second-party opinions, certification and reporting
Greenwashing risks specific to labelled bonds
Labelled bonds in Vietnam and ASEAN, with an example of allocation reporting

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This chapter is in the full book

Chapter 1 is free to read online. The full text of chapter 12 — with its tables, figures, worked examples and practice lab — is available in the complete edition of ESG and Sustainable Investing: From Theory to Practice — Vietnam Readiness (Volume 4, NXW Investment Library).

Read Chapter 1 free Get the full book — [email protected]

Sections of this chapter

12.1 A bond with a label

12.2 Use-of-proceeds bonds

12.3 What counts as green or social?

12.4 Same issuer, same risk

12.5 Sustainability-linked bonds and loans

12.6 Pricing: is there a greenium?

12.7 Verification and reporting

12.8 Greenwashing risks in labelled bonds

12.9 Labelled bonds in a portfolio

12.10 Green bonds in Vietnam and ASEAN

← Chapter 11: Stewardship, Engagement and Voting Chapter 13: ESG and Performance: What the Evidence Says →