Review on the use of floating rate note (FRN) linked green bonds as a tool for financing sustainable climate action goals

Abstract

This paper attempts to highlight the benefits of financing Green bonds by linking them to Floating Rate Notes (FRN). Climate change and its global impacts are a common concern for all nations. The global leaders across the world have pledged collectively to invest $1 trillion in Green bonds by 2020 with a common vision for limiting the climate change increase to below 1.5 °C above the pre-industrial level by the end of the century. The findings of this study suggest that achieving the milestone goals is possible through the participation of every individual. Out of the all-out bonds that were universally given a year ago, more than 3% of the financial backers were put into green bonds. This market has tremendous development potential for future issuance since there is a change in perspective in the financial backers’ interest towards feasible speculations. Over 3% of the global investors have participated in Green bond investments. Adding the feature of FRN to the issuance of Green bonds will attract more participants, which will help meet the financial goals faster and a quicker response towards the decided framework.