Certain Issues of Green Bonds and Their Perception by Financial Markets, with Focus on Hungary

Sági, Judit (2020) Certain Issues of Green Bonds and Their Perception by Financial Markets, with Focus on Hungary. POLGÁRI SZEMLE: GAZDASÁGI ÉS TÁRSADALMI FOLYÓIRAT, 16 (Spec.). pp. 423-433. ISSN 1786-6553

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Abstract

The environmental load of the economies and climate change have increasingly necessitated green investments, financed by the so-called green bonds, invented by financial markets. The author analyses the green goals to be achieved by issuing green bonds as market instruments, and the structuring of funding in terms of risks and cash-flows, through specific cases in progress. The Hungarian sovereign green bond issue is an example of a successful fundraising from the capital markets, and the central bank initiative is a case for helping the private sector in the green transition. It is found that the success of green financing depends primarily on the financial market participants’ perception of the safety of investment in green bonds. An essential element is certification by an external third party, to assure investors that the project being financed will not only result in financial returns but also in environmental benefits.

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