The Development of Green Bonds: Current Issues and Solutions

Abstract

The increasing deterioration of climatic issues in recent years promoted the development and the necessity of green finance, and green bonds have also developed rapidly under the opportunity. The purpose of this paper is to review the development of green bonds to figure out issues encountered in development and corresponding solutions. The main body of this paper can be divided into three sections. The first section of this paper concentrates on the historical development and current status of green bonds. The second and third sections first concentrate on analyzing issues that influence the development, then focusing on solutions from the viewpoints of investors, government, and issuers respectively. The results revealed that both historical and current overall development of green bonds shows positive; the issue of greenwashing can be solved with the policy of Third-Party Certification and enhancing investors’ perceptions; the issue of financial performance can be improved by enhancing liquidity and fixed-income assessment; the barriers of globalization can be solved by setting up green investment banks in developing regions, enhancing regional relationships and setting forward contracts. It also provides suggestions for three parties: local government, global organizations, and issuers to carry out the solutions better. This paper contributes to further investigating the development of green bonds, which is conducive for researchers intending to study in related dimensions.