Financing Green Growth

Even financial sector is inevitably leading to a point when environmental friendly project will be preferred.

Apple issued first tranche of so called greed bonds. Returns from these bonds should finance development of energy efficient and more recyclable products. Moreover, this should help reduce greenhouse gases. With bond emissions Apple gained 2 billion euros for 6 or rather 12 years. The six-year bond offers annual interest of 0,032 procent and the twelve-year bond offers 0,5 percent.

The bonds present one of the very first examples of projects to be in compliance with EU Commission Action Plan on Sustainable Finance, which was approved last year. The goal of EU Commission is that finance companies, exchange stocks, insurance companies and banks consider effects of projects on environment while financing. Criteria for subjects of money and capital market should later be set up to help them decide on whom to lend money.

Such an approach to financing seems to be appealing, yet can lead to distortion in making decisions on providing funds to third parties. While profitability of investment is the most important criterion for now, in future threat of sanctions could have a huge impact on the decision, if the financed projects proves to be insufficiently ecological.


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