Foundational
Green Bonds
Bonds that ring-fence their proceeds exclusively for environmental projects, with transparent reporting requirements before and after issuance.
Cap-and-Trade
A compliance system where a government caps total emissions, issues tradeable permits up to that limit, and lets the market determine who reduces and who pays.
Carbon Offsets
Certificates representing one metric tonne of greenhouse gas emissions avoided, reduced, or removed elsewhere, used to compensate for emissions a buyer cannot yet eliminate.
Sustainability-Linked Bonds
Bonds whose financial terms (typically the interest rate) change depending on whether the issuer hits pre-agreed sustainability targets.
The Greenium
The lower yield, and therefore lower borrowing cost, that green bond issuers enjoy compared to equivalent conventional bonds from the same issuer.
Transition Bonds
Bonds designed to help high-emitting, hard-to-abate industries raise capital for decarbonisation, filling a gap that green bonds and sustainability-linked bonds don't fully address.