GREEN INVESTMENT
WHAT ARE SOVEREIGN GREEN BONDS
Published By Livemint
| 07 Feb, 2023
Green bonds are popularly known as climate bonds
They are fixed interest-bearing financial instruments. Indian govt issued their framework in 2022
Green bonds are issued by sovereign entity/corporation, or inter-governmental organisation
Green bonds carry nil credit and default risks, and have no project risks
It is a good to invest money in environmentally sustainable projects
Retail investors can invest in green bonds through RBI retail direct website or on their brokerage account
There is no specific tax benefits on these bonds
There is risk of ‘greenwashing’, which means making environmental claims without evidence
Despite environmental benefit, it might not help everyone in meeting their financial goals
Experts believe India’s green bond market is at a nascent stage and needs more time to mature and improve