Skip Header Navigation

About RBC > Community & Sustainability > News >A new product for investors concerned about our environment – What you need to know about green bonds

A new product for investors concerned about our environment – What you need to know about green bonds

With extreme weather, endangered species and water scarcity increasingly making headlines around the world, it’s clear that environmental issues facing our planet are growing in number and severity.

In many cases, large amounts of capital are needed to address these complex and systemic problems. Research shows a growing interest among high net worth individuals, institutional investors and mainstream investors to direct funds towards opportunities that generate financial returns as well as social or environmental benefits.

Enter green bonds, an innovative capital-raising debt instrument, designed specifically for this purpose.

Bonds are primarily issued by companies and governments to raise capital to finance programs and initiatives. Green bonds differ from traditional bonds in that the capital raised is directed to projects with a specific environmental benefit, such as reducing greenhouse gas emissions, adapting to climate change, increasing energy efficiency, or expanding the use of renewable energy.

Green bonds are currently available to institutional investors, asset managers, pension funds and insurance companies. As these investors become more concerned with the social and environmental performance of the companies in their portfolios, the demand for responsible investment products, like green bonds, will increase.

RBC Capital Markets recently acted as Lead Manager on the first green bond issued by a Canadian province. The Province of Ontario’s $500 million green bond attracted an impressive $2.4 billion in orders from investors around the world, demonstrating a strong appetite for the product. The green bond issue helped to diversify the Province's investor base by attracting a number of international investors who do not typically buy Province of Ontario bonds.

Green bonds represent a new way to unlock private capital and financial markets for the greater good. To learn more about RBC Debt Capital Markets, please click here.