Bond Investor Revolt Brews Over Bogus Green Debt Flooding Market
Buyers want securities that make the world a better place, but offerings labeled as green aren’t always what they seem.
Photographer: Bay Ismoyo/AFP/Getty Images
In a booming global bond market, there are few segments that are growing quite like the money-minting machine for green bonds. So eager are investors to buy up these notes that they’re willing to pay a premium -- and accept lower interest payments -- for the privilege.
The risk is that in this mad rush they’re letting a feel-good label obscure the reality of their investments. At the forefront of concerns among a small but growing contingent of bond buyers is greenwashing: the possibility that governments and companies are exaggerating or misrepresenting their environmental credentials or sustainability bona fides to tap feverish demand, lower borrowing costs and boost their reputation.