Invest in Climate-aligned Bonds

Moving capital markets for a low-carbon, climate-resilient future

Invest in Climate-aligned Bonds

Moving capital markets for a low-carbon, climate-resilient future

At a glance

What are Climate-aligned Bonds? 

As investors move towards decarbonising portfolios and integrating Environmental, Social and Governance (ESG) considerations into investment decisions, deals with high climate impact and well-documented green credentials have never been more crucial.  

Climate-aligned Bonds (CABs) fill the gap for financing underlying climate-aligned activities that may not be as visible and transparent as labelled bonds, but address climate issues and promote a low-carbon economy. These include the development of renewable energy sources and transport systems.

The CAB universe is worth US$913.2 billion today – nearly half the labelled universe, according to Climate Bonds data. In a space where private capital is key to scaling the low-carbon solutions the world urgently needs, the investment opportunities are substantial. 

CABs versus climate/green bonds: What’s the difference?

A targeted focus

Unlike green bonds which accommodate broad environmental aspects, CABs target climate change issues.

Unlabelled potential

Unlabelled potential

CABs support climate-aligned initiatives but have not been labelled as green by their issuers – and are therefore likely to go unnoticed by prospective investors.

Pure-play issuers

Where labelled green bonds are primarily issued by diversified companies, the unlabelled portion of the CAB universe derives mostly from pure-play issuers.

What makes CABs viable and attractive?

Wider investment opportunities

The CAB universe expands opportunities for building climate-themed portfolios beyond labelled green bonds.

Runway for growth

The CAB market size exceeds US$1 trillion and is expected to mature by 2029.

Uncover possibilities

CABs identify untapped areas of potential where future green bonds can be labelled.

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