Sokol points to transparent disclosures as a key component in categorizing green bonds. For instance, Apple recently published annual reports on its green bond issuance where the company outlines how it invested its green bond proceeds so far, including green buildings, renewable energy sources to power data centers and robotic technology.
Bank of America’s green bond helped fund energy efficiency projects in several small towns, residential solar systems and wind power facilities.
Georgia Power Company was the first U.S. electric utility to issue a green bond to finance several solar projects in Georgia.
Morgan Stanley’s green bonds proceeds finance several wind farms as well as LED lighting upgrades.
Consequently, as more industries adopt and issue green bonds to finance environmentally friendly projects, green debt securities could become a growing part of a diversified investment portfolio.
“As the growth of the market progresses, we expect green bonds to make up an increasingly large share of the overall global debt market, and consequently, within investors’ core fixed income portfolios,” Sokol said.
For more information on fixed-income assets, visit our bond ETFs category.