How can I put my money where my mouth is?

There is a growing interest emerging in “green” or “climate” bonds for funding sustainable development and clean energy technology.  They provide payback security desired (or required) by investors AND are specifically targeting environmentally positive activities, which is making them increasingly attractive in the investing world.  International Finance Corp offered a $1 billion green bond for climate smart projects in developing countries; the bond offering “which was heavily oversubscribed, was sized to address the growing demand from an increasing number of investors interested in climate-related opportunities.”  IFC now plans to issue at least $1 billion in green bonds per year, according to Globe-Net. 

The European Investment Bank’s Climate Awareness Bond (to support lending for renewable energy and energy efficiency), the Export-Import Bank of Korea, and the World Bank (who originally developed the concept in 2007/2008) are joining the IFC in this effort.  “The appeal of this product lies in its simplicity - the credit quality of the bonds is the same as that of other World Bank triple-A rated bonds, it is a 'plain vanilla' structure, a liquid instrument that can be traded as easily as other 'plain vanilla' bonds issued by the World Bank, with a market competitive return. With these characteristics, it fits the requirements of core portfolios of large fixed income investors seeking to support activities that have a positive impact on climate change.”  

The global market for these types of bonds has almost doubled over the past 18 months, growing from $5 billion to approximately $9.5 billion, but estimates are that the total green bond market is much higher. 

In the U.S., Massachusetts is gearing up to sell $1.1 billion worth of bonds not only for climate change projects, but clean water, energy conservation and efficiency, open space and land acquisition, environmental remediation and habitat restoration.

There is a proposed State Clean Energy Finance Initiative in Congress by the Clean Energy and Bond Finance Initiative to bring together public infrastructure financing, clean energy fund managers and institutional investors to raise capital at a higher scale.  The idea is for the initiative to be housed at the Treasury but program development and project approvals would be at the state level.   "The State Clean Energy Finance Initiative is designed to assist the clean energy industry in accessing affordable capital through an innovative and efficient program structure," said Lew Milford, President of Clean Energy Group.

This whole world of socially responsible investing, bonds, stocks and returns is relatively new to me.  I look forward to delving into this further over the next year as I embark on a new sphere of information/learning in finance and investing.