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Green Bonds explained simply

Green bonds are becoming an increasingly important part of the financial landscape.

In France, as in New York and Washington, they attract companies, governments and public institutions, as well as many other business groups. Their aim is to finance projects with a positive impact, particularly in the fields of energy, transport and sustainable development.

This type of investment makes it possible to support the energy transition while guaranteeing a certain rigor in the management of funds. Green bonds generally comply with strict ESG criteria, with internationally recognized benchmarks such as those of the World Bank or Caisse des Dépôts, which precisely define eligible projects and the data to be collected to ensure transparent monitoring.

In Europe, players such as EDF, the SNCF Group and privatebusiness groups regularly publish reports on the use of the funds raised. These bonds enable millions of euros to be mobilized for concrete projects, in France and elsewhere.

But how do these green bonds work? Why are they so successful? And above all, do they have a real impact on emissions? Here's how.

 3 Contents

What is a Green Bond?

📗 A classic bond... but green.

A green bond is a financial instrument that functions like a conventional bond. A company, public institution or government issues a bond to raise funds on the markets. In return, it undertakes to repay investors with interest.

The difference is that the amounts raised are exclusively dedicated to eligible sustainable projects. These can range from the construction of solar farms to energy-efficient home renovation and low-carbon transport systems.

👉 For example, the EDF Group raised €4.5 billion via green bonds between 2013 and 2020, to finance its renewable infrastructure. These issues are often rated according to an ESG index, guaranteeing their compliance with sustainability criteria.

It is therefore a means of responsibleinvestment, governed by ESG criteria. This type ofbond supports the energy transition, while offering investors a return comparable to that of conventional bonds.

⚙️ How does it work?

Issuers of green bonds must define in advance what types of projects will be financed:

- 🔋 renewable energy production,
- 📉 reduction in CO₂ emissions,
- 💧 sustainable water management,
- 💰 circular economy, etc.

Next, they must publish an issue framework, often in PDF format, specifying eligibility criteria, selection methods and monitoring procedures. This ensures transparency. These criteria can also be based on a recognized index and reliable data to guarantee the quality of the projects financed.

👉 Example: in 2022, the SNCF Group issued a €1.25 billion green bond to finance energy transition projects, including renewing its rolling stock and improving the energy efficiency of its infrastructure in the country.

Source: Green securities report SNCF 2022

Finally, investors receive regular reports to verify that the amounts invested are being used as intended. These documents serve as a reference on the markets to assess the issuer's credibility.

🏛️ Who issues these green bonds?

Green bonds are not just for a small circle of insiders. Today, they are used by a large number of players in France, Europe and abroad.

👉 On the public side, we find the World Bank, Caisse des Dépôts, and cities such as Paris, New York and Washington.

👉 On the private side, groups such as EDF, Engie and even Apple have entered this market.

👉 In 2023, more than $600 billion worth of green bonds were issued worldwide. Europe accounts for almost 50% of this volume, with France at the forefront.

These investments show that green bonds are more than just a fad. They have established themselves as a concrete lever for sustainable development, supported by a wide range of players.

📑 Framework and transparency: a key issue in green bond management

Each green bond issue is based on a strict framework that defines the criteria for projects eligible for financing. In particular, this framework specifies the types of greenhouse gases concerned, the sectors targeted, such as renewable energies, and the indicators to be monitored.

The issuing group must ensure regular reporting to provide accurate data and information on the use of funds and environmental impact. This information is often compiled in an annual report, which also includes trends in emission rates and performance according to a recognized index.

The timing of publication of these documents is key to ensuring transparency and investor confidence, particularly in a market where regulatory requirements and stakeholder expectations are evolving rapidly.

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Why do these obligations have such an impact?

🌍 A powerful lever for sustainable development

Green bonds enable the financing of concrete projects with a measurable impact. They focus investment on key transition sectors: renewable energies, clean mobility, energy efficiency, waste management...

👉 Example: in 2021, our country has issued over €15 billion worth of green bonds, financingsolar energy projects in Corsica and thermal renovation projects in public buildings across the country.

These bonds play a key role in the development of large-scale sustainable infrastructures. They enable millions of euros to be channeled into solutions that reduce emissions and improve local resilience.

📊 Measuring and managing the impact of green bonds

What distinguishes a green bond from a simple marketing product is its transparency framework. Issuers must publish allocation and impact reports, often available in PDF, with precise indicators (tons of CO₂ avoided, MWh produced in renewables, energy efficiency, etc.).

These documents have become benchmarks in the world of sustainable finance. They enable investors to monitor fund management and check that commitments are being met.

💸 More responsible and attractive investments

Green bonds are attracting more and more institutional investors, banks, insurance companies and asset managers. Why are they so attractive? Because they combine financial profitability with environmental impact.

👉 For example, in 2022, Caisse des Dépôts will have included more than 10% green bonds in its bond portfolio.

ESG criteria have become essential filters in investment strategies. By choosing green bonds, investors align their investments with society's expectations and carbon neutrality objectives.

This growing demand is driving the market upwards. Green bonds are no longer a niche product: they are becoming a standard, whether in France, New York, Paris or Washington.

Green bonds: what prospects for France and beyond?

🇫🇷 Strong momentum in France and Europe

Franceis one of the world leaders in the green bond market. It was the first state in the world to issue a sovereign green bond in 2017. Since then, the initiative has been widely followed in Europe.

👉 In 2023, France issued a total of €35 billion in sovereign green bonds, financing projects inenergy, biodiversity andpublic infrastructure renovation.

Paris plays a central role in this dynamic, as a financial center committed to sustainable finance. Players such as EDF, the SNCF Group and local authorities are increasingly using green bonds to accelerate their transition.

🌐 Global issues, international coordination

The ecological transition does not stop at borders. That's why green bonds are an integral part of international cooperation. The World Bank regularly issues green bonds to finance eligible projects in developing countries.

👉 Example: in 2022, it financed asolar energy programin Burkina Faso and climate resilience infrastructure in the Philippines.

In New York, the city raised over $2 billion via green bonds to modernize its drinking water network. In Washington, green bonds are financing the electrification of public transport.

This coordination between groups, cities and institutions is creating a global dynamic in favor of sustainable management and low-carbon development.

📈 Towards the widespread use of green bonds?

Green bonds are no longer just another tool. They are becoming a standard in investment policies. More and more regulators are imposing frameworks to guarantee the quality and transparency of these issues.

👉 In Europe, the introduction of the EU Green Bond Standard aims to harmonize the market and boost investor confidence, notably by defining a clear index of criteria to be met.

The potential is immense: according to the Climate Bonds Initiative, the global green bond market could reach $1,000 billion in annual emissions by 2025. A milestone that would mark a shift towards more responsible finance.

Green bonds are more than just a financing tool. They are powerful levers for transforming the way we invest, produce and think about sustainable development.

In France, Paris, New York and Washington, they mobilize millions of euros for concrete projects led by public and private companies: green infrastructure, clean energy production, housing renovation, low-carbon mobility, with a particular focus on the efficiency of the solutions implemented.

Players such as EDF, SNCF, the World Bank and Caisse des Dépôts, as well as many other committed companies, are leading the way. Their commitment is often documented in PDF reports, which have become benchmarks for investors committed to rigorous management and sound ESG criteria.

In the face of the climate emergency and societal expectations, green bonds offer a credible, measurable and, above all, replicable response on a large scale.

Their success shows that a different kind of finance is possible. A finance that doesn't just count... but really counts.