105 - Green Bonds vs. Transition Bonds

What’s the best bet for investors?

The $1 trillion question in sustainable investing

Green finance is booming.

But not all bonds labeled "sustainable" are the same.

As the world races toward net-zero, green bonds and transition bonds have emerged as two competing forces in climate finance.

But which one is the better bet for investors?

Are green bonds the gold standard, or are transition bonds the realistic alternative for high-emission industries? Let’s break it down with real data.

A graph showing the value and number of transition bond deals from 2017 to 2024 YTD. The value of deals peaked in 2023 at approximately $18 billion, with a notable increase in both value and the number of deals in 2024. Data sourced from efdata.org.

Transition Bond Issuance Over Time

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