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Sustainable Development and Climate Change 219

(vii) Green bonds are debt instrument issued by an entity for raising funds from investors
and the proceeds of a green bond offering are used towards financing ‘green’ projects.
Green bonds are an effective vehicle to raise capital for renewable energy projects
while meeting the environmental targets of the investors and climate targets of the
Government of India. In 2017, to give push to Green Bonds issuances in India, SEBI
issued guidelines on green bonds including listing of green bonds on the Indian stock
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exchanges. The launch of green indices such as S&P BSE CARBONEX (in 2012),
MSCI ESG India (in 2013), and S&P BSE 100 ESG Index (in 2017) allows passive and
retail investors to invest in ‘green’ companies. As of 24 December, 2020, eight ESG
th
mutual funds have been launched in India.

6.28 The cumulative issuance of global green bonds crossed US$ 1 trillion mark in 2020. Despite
overall growth in the global bond markets, green bond issuance in the first half of 2020 slowed
down from 2019. Green bond volumes were the most negatively impacted of all themes, but
there were positive signs in the market that point to increasing demand and better performance
of green vs. vanilla debt instruments (Figure 7). India has the second largest green bond market
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among the emerging markets after China (Figure 8).

Figure 7: Thematic split of Sustainable Debt Market in H1 2020

350

300 Green Sustainability

250 Social Pandemic

200

150

100
US$ Billions 50

0
2014 2015 2016 2017 2018 2019 H1:2020

Source: Climate Bond Initiative; Sustainable Debt Global State of the Market H1 2020

14 https://www.sebi.gov.in/legal/circulars/may-2017/disclosure-requirements-for-issuance-and-listing-of-green-debt-
securities_34988.html
https://www.climatebonds.net/system/tdf/reports/cbi-sustainable-debt-global-sotm-h12020.
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