Green bonds : a model to mobilize private capital to fund climate change mitigation and adaptation projects

The capital markets will need to play an important role in mobilizing private funding for climate change mitigation and adaptation projects. However, to raise the funds required to make an impact in the fight against climate change, investment products must be designed to appeal to investors with a substantial asset base. Pension funds and sovereign wealth funds have large allocations to fixed income. Green bonds are an example of an innovative fixed income investment product that appeals to investors for this asset class and can pave the way for the next phase of products to mobilize significant capital to finance the greatest challenge faced by our generation.