What is Green Bond? And Why the Market Contracts By Nearly 33%?
The world nations are raising their concerns towards the contraction of the Green Bonds and the reducing fund towards the climatic adaptation.
Green bond is the recent talks among the nations who are focusing on strengthening their climatic policies. This bond is designed to provide financial support through funding for promoting the environmental and sustainable projects which includes renewable energy, clean transportation, and pollution control for any nation. Unlike the other bonds, this one is completely allocated for the initiatives that are eco-friendly.
This week, the Government of Canada successfully priced its third Canadian-dollar-denominated green bond.
— Finance Canada (@FinanceCanada) February 21, 2025
This $2 billion issuance of a 7-year bond is part of a commitment to regular green bond issuances.https://t.co/UB3jpnT2bd pic.twitter.com/YMPYIE1Sqm
In 2025, this green bond encountered a massive set back and resulted in contraction of 33% which signifies the decline of sustainable finance. The roll back of the major economies such as the U.S. and the EU plays a significant role for this terrific impact and it has also shaken the confidence of the investors. Following that a confusion has been clouded around the qualification of terming ‘Green’ this is due to the weakening of ESG standards and the regulatory inconsistencies. Other challenges like inflation, political instability and cold war within the nation have diverted the authorities from focusing on climate financing. Thus, this decline is an alarming sign of diminishing to all the global governments whose climatic goals are dependent on these ‘Green Bonds’.
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