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Green Bond Market Set to Grow 20-Fold in Two Years

The market for green bonds has increased ten-fold, from $2 billion to $20 billion, since 2012, and the non-profit Climate Bond Initiative expects total sales to reach $40 billion by the end of the year, reports Ceres President Mindy Lubber. The bonds provide needed capital for clean energy projects, she says—and just as important, they offer annual rates of return of 4-5% with minimal risk. “If opportunities exist that provide market returns as well as tangible, measurable environmental impacts, then I think that is a great investment opportunity,” said Cecilia Reyes, group chief investment officer at Zurich Insurance Group. “The question to ask is not why invest in green bonds, but why not.” Unilever, Toyota, and Warren Buffet’s Berkshire Hathaway have recently issued green bonds, and Lubbers says more is needed: to have a “solid chance” of limiting global temperature increases to 2°C, “total global investments in clean energy must be doubled, to $500 billion a year by 2020, and quadrupled to at least $1 trillion annually by 2030.”

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