Green Bonds an investment tool for resilient future: Helping to achieve Circular Economy business models
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Date
2021-10-26
Authors
Shinde, Aishwarya Anandrao
Journal Title
Journal ISSN
Volume Title
Publisher
University of Waterloo
Abstract
Climate change is one of the biggest collective action problems in society, it brings up the need for countries to transition towards smart, low-carbon economies over the next 20 years. To reach the emission reduction target, set by the Paris Agreement, a significant increase in the rate of existing building energy efficiency renovations and the generation and procurement of renewable energy is vital. If we adopt a circular economy to make and produce materials, products, and food, we can surely begin to see an accomplished picture of a resilient, net-zero world. This work makes the case for the consolidation of the circular economy and financial gap in varied industries.
The financial sector plays a vital role in the transition into a low-carbon economy. In this thesis, we interpret the current green bond market development by analysing Climate Bond Initiative data focused towards labelled green bond market from 2015-2020. First, we study green bond issuance- directed towards the region, financial institutions, and industry type. Second, we randomly sample green bonds whose proceeds are directed towards circular economy projects and address the gap in the issuance considering industry criteria. This mixed evidence about the green bond market and investment towards circular economy-based projects would explain the pattern of what projects come under the circular economy category and how much is the percentage of proceeds directed solely towards the circular economy.
This thesis is based on a distinctive methodology integrating an extensive literature review, market data analysis with a wide range of green bond market participants. We highlight the current barriers explaining the lack of scalability of the green bond market; the perception of not investing in the circular economy and the need for a paradigm shift required for the scalability of the green bond market to achieve a circular economy in various industries. This thesis makes several recommendations to overcome these obstacles and opens the prospect of green bonds to finance a circular economy-based business model in the coming future.
Description
Keywords
green bonds, circular economy, sustainable finance, barriers, enablers, sustainable investment, financial institutions
LC Keywords
Environmental protection--Economic aspects, Greenhouse gas mitigation--Economic aspects, Sustainable development--Finance, Social responsibility in banking, Banks and banking--Environmental aspects, Circular economy