It’s not only companies that issue bonds to finance their activities. Corporations and Governments (Federal, Provincial and Municipal) will both issue bonds to finance key projects and initiatives.
A bond is a fixed-income security that allows an organization to borrow money from bondholders. In exchange, the bondholders receive an interest payment.
A Sustainability Bond is a type of bond where the proceeds are used strictly to finance environmental and/or social projects.
Another type of ESG bond is becoming more common in the ESG universe: bonds to support sustainable development. In exchange for a formal commitment to improve their environmental and social balance sheet, the borrower gains access to capital at an advantageous interest rate.
The impact of bonds in Responsible Investing is often understated. Responsible Investing is primarily associated with equities – but consider the following:
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