- Manan Jain, School of Management, AIMETC, Jalandhar
Green bonds are specialised fixed-income instruments designed to fund projects that deliver measurable environmental benefits. Introduced first by the European Investment Bank in 2007 and later by the World Bank in 2008, they have since evolved into a major global tool for climate-friendly financing. These bonds support renewable energy, clean transportation, water conservation, sustainable buildings, and climate-resilient infrastructure.
India entered the green bond market in 2015 following SEBI’s regulatory framework. Since then, public and private issuers have financed large-scale initiatives such as solar parks, metro systems, and water projects. Key examples globally include the Pavagada Solar Park (India), London Array (UK), and Seychelles Marine Spatial Plan.
Green bonds offer benefits such as tax incentives, lower borrowing costs, increased access to foreign capital, and strengthened corporate sustainability practices. However, challenges persist: greenwashing, lack of uniform certification standards, high verification costs, and limited secondary-market liquidity reduce investor confidence. Despite these barriers, green bonds are reshaping investment behaviour by integrating ESG priorities into financial decision-making. With stronger policies, better reporting standards, and wider investor awareness, they hold significant potential to support India’s climate goals and global sustainable development.