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What are the three rationales for issuing corporate green bonds?

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Final answer:

The three rationales for issuing corporate green bonds are low risk associated with repayment obligations, conservation of resources and environmental quality, and the commitment to ensuring a livable world for future generations.

Step-by-step explanation:

The three rationales for issuing corporate green bonds are multifaceted but can be summarized as follows:

  1. Low risk: Corporate green bonds are often seen as low-risk debt instruments because the issuer, usually a large corporation, has promised specific repayments over time. In the event of a failure to meet these obligations, bondholders have the right to push for bankruptcy proceedings to recover their investments.
  2. Conservation of resources: By investing in green bonds, companies align with sustainable practices, focusing on the conservation of resources and improving the quality of the Earth's environment. This commitment to sustainability can enhance a company's reputation and resonate with environmentally conscious investors.
  3. Future generations: Green bonds underscore the issuer's commitment to laying the groundwork for future generations to inherit a livable world. They serve as an investment in projects that prioritize long-term environmental well-being, which can be a compelling selling point for socially responsible investors.

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