Lessons from Measuring the Impact of Green BondsĮxploring how green bonds are currently tracked and measured can inform how they could be improved and leveraged for climate resilience.
In light of these challenges, one important step in leveraging green bonds for climate resilience is developing and applying appropriate criteria to measure, monitor and evaluate the impact of green bonds. Unlike climate change mitigation, which seeks to reduce greenhouse gas emissions, the goals of climate resilience are highly dependent on context. Given its broad mandate, defining and measuring climate resilience for everyone and everything is a challenge. Other projects may focus on systems, such as introducing a national data infrastructure to monitor and improve operations, funding research and development for new technologies, or providing economic, health, or other social services to support population resilience to climate change. The scope of climate resilience projects may focus on physical assets, such as reinforcing a dam, elevating buildings, or updating building codes to reduce flood risk. Projects and activities that foster lasting climate resilience vary widely by geography, the built environment, and community values, among many other factors. The Challenge of Defining and Measuring Climate ResilienceĬlimate resilience is an iterative, continually evolving process for managing climate change ( PDF) and its risks. This leaves policymakers, practitioners, and researchers in this space with a key question: how can these bonds contribute to greater climate resilience over time? The significance of green bonds may depend not only on having a lot of them but also on carefully developing, investing, and tracking projects against the larger goal of climate resilience. Given this heightened interest from both issuers and investors, green bonds could emerge as one key source of capital to help facilitate the necessary energy, land, ecosystem, infrastructure, and industrial system transitions to build resilience in the face of climate change.Īt the same time, if the use of green bonds to finance climate resilience increases, it could be necessary to ensure these investments are in fact contributing to greater resilience in the nations, regions, or communities they support. Simultaneously, investors have a growing interest in providing capital to fund green bonds, and demand for investing in green bonds has begun to surpass the available supply. As governments, businesses, and other entities look for capital to help meet their climate resilience goals, green bonds could represent an opportunity to attract and leverage new private finance and catalyze local markets to support public climate resilience initiatives.
The COP26 summit in Glasgow underscored the importance of climate resilience as a key policy goal around the world.
ADOBE STOCK SERIES
Series of commentaries on environmental finance and green bonds.
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