Sovereign Green Bonds (SGrBs)

Sovereign Green Bonds (SGrBs): India's efforts to finance green investments through Sovereign Green Bonds (SGrBs) face low investor demand, limiting the government's ability to secure a green premium (lower yields than regular bonds). About Green Bond: It issued by any sovereign entity, inter-governmental groups or alliances and corporates with the aim that the proceeds of the bonds are utilised for projects classified as environmentally sustainable. They are financial instruments that finance green projects and provide investors with regular or fixed income payments, announced in the Union Budget 2022-23. First ever green bond: Issued by the World Bank in 2008. Significance: Importance financial instrument has emerged as an important financial instrument to deal with the threats of climate change and related challenges.
  • Collaboration: It’s critical to connect environmental projects with capital markets and investors and channel capital towards sustainable development.
  • Carbon footprint: It will further reduce the carbon footprint of the country.
  • For investors:  A platform to engage in good practices, influencing the business strategy, provides a means to hedge against climate change risks while achieving at least similar, if not better, returns on their investment.

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