The global financial system needs to be aligned with the energy transition to a low-carbon future. Green bonds, i.e. bonds specifically earmarked to be used for climate and environmental projects, issued by public and private issuers are important for funding climate and sustainable projects.
Green bonds are one of the most prominent innovations in sustainable finance of the past decade. However, to date the few academic studies on green bonds have tended to focus on what impact green labels have on bond yields.
This paper aims to clarify the role of green bonds in financing adaptation and resilience. Green bonds are often referred to as a potential contributor to filling the adaptation finance gap, specifically in terms of channelling private sector finance to adaptation.