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December 17, 2019

Op-ed by Jakob Thomae in Responsible Investor: Consumers reject the EU’s green bond framework for good reason

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Of 2,000 retail investors surveyed on green bonds, 90% reject the approach developed by the European Commission, says 2° Investing Initiative’s Jakob Thomae

As the cumulative issuance of labelled green bonds passes the $1trn mark, a debate on the relevance of the ‘earmarking’ a bond’s use-of-proceeds is finally taking place.

On the one hand, a growing chorus of voices suggests that earmarking use-of-proceeds is a nice marketing trick, but what actually matters is the environmental trajectory of all investments made on the ground, and the trajectory of issuers’ balance sheets. After all, green bond investors are exposed to these balance sheets rather than the earmarked projects.

On the other hand, the wider green bond industry continues to advocate for the idea that ‘use of proceeds’ is the only thing that matters, and that earmarking equals “financing” the green projects at a project-finance level.

For more, please see the original article on Responsible Investor: https://www.responsible-investor.com/articles/comment-consumers-reject-the-eu-s-green-bond-framework-for-good-reason

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