From the perspective of the issuer, the parallel trading of both conventional and green bonds fragments liquidity in the market and may in fact undermine the traditional objectives of efficient sovereign debt funding. [...] The EU itself is set to join this list of issuers, having announced that one third of the funding of the Next Generation EU programme will be in the form of green bonds (Lehmann, 2020). [...] The problem of attributing bond proceeds to specific projects is inherent in a bond structure in which the investor has recourse to the entire balance sheet of the issuer, as opposed to a project or revenue-based bond. [...] A key investor right under the terms of the bond prospectus is access to reports that enable the tracking of the allocation and use of proceeds. [...] The first obstacle in computing the carbon footprint of a sovereign issuer is the definition of the relevant scope of emissions.
- Pages
- 16
- Published in
- Belgium
