Rare ESG Debt Format Endorsed as Key to Dodging Greenwashing (1)

A rarely-used financial product that makes it easier to monitor the performance of sustainable projects has been endorsed as a reliable way to avoid greenwashing in the $4 trillion ESG debt market.

The idea combines green debt, where proceeds are broadly used to fund environmental projects, with sustainability-linked bonds (SLBs), where the amount of interest an issuer pays depends on whether it meets specific sustainability goals. The Institute for Energy Economics and Financial Analysis, which advocates for a faster transition from fossil fuels, said on Thursday that a hybrid model -- so-called green SLBs -- can ease investors’ greenwashing concerns ...