Green Technology & Green Bond

Green Technology: -
• Green Technology refers to practical application of scientific
knowledge that is design to reduce or revere the negative effect of
human activities on the environment.
• It refers to the development and application of innovative solutions
that have minimal negative impact on the environment while
promoting sustainability and resource efficiency.
u Green Technology Covers
• Environmental Technologies for environmental monitoring and
assessment, Pollution prevention and control, redemption and
restoration technologies design to improve the condition of
ecosystem.
Goal of Green Technology
• Sustainability: meeting the present needs without compromising
the ability of future generation to meet their own needs
• ‘Cradle to cradle’ design: Creating product that can be fully
reclaimed or reuse. (Example Green roof)
• Source Reduction: - Reducing waste and pollution by changing
pattern of production and consumption.
• Innovation: - Developing alternative technologies that reduce the
damage on human health and the environment.
• Viability: - Creating economically viable activity around the
technologies and product that benefit the environment.
Key features and concepts related to green technology: -
u Renewable Energy: - It discharge little or no greenhouse gases and help reduce reliance on
fossil fuels.
u Energy Efficiency: - Energy-efficient technologies reduce waste and minimize energy
consumption.
u Sustainable Transportation: - This involves the development of cleaner modes of
transportation, such as electric vehicles, hydrogen-powered vehicles, and public transit systems.
u Waste Management: - Green technology includes innovations in waste reduction, recycling,
and waste-to-energy conversion. It is going to create Circular Economy.
u Green Building and Architecture: - Sustainable building practices focus on designing and
constructing structures that use eco-friendly materials, minimize energy consumption, and
optimize indoor environmental quality. (Rain water storage, roof gardening)
u Agroecology: - Green technology can also extend to agriculture through methods that prioritize
sustainable farming practices, reduce chemical inputs, and enhance soil health.
• The adoption of green technology is driven by the need to
mitigate the impacts of climate change, reduce pollution,
conserve natural resources, and create a more sustainable
future.

• Governments, businesses, and individuals all play a role in

advancing green technology through policies, investments,
research, and lifestyle choices.
Green Bond
u A bond is a debt instrument that represents a loan made by an investor to a borrower,
typically a government or corporation.

u When you purchase a bond, you are essentially lending money to the issuer in exchange for
periodic interest payments and the return of the principal amount when the bond matures.
u Issuer: The entity that borrows money by issuing the bond. This can be a government
(government bond) or a corporation (corporate bond).
u Principal: The initial amount of money that the bondholder lends to the issuer. This is also
referred to as the "face value" or "par value" of the bond.
u Interest (Coupon) Rate: The fixed or variable rate at which the issuer agrees to pay interest
on the bond's principal. The interest payments are usually made semiannually or annually.
u Maturity Date: The date on which the issuer is obligated to repay the bond's principal
amount to the bondholder. At maturity, the bondholder receives the face value of the bond.
u Yield: The effective return on investment for the bondholder. It takes into account both the
coupon payments and any potential price changes in the bond over its lifetime.
u A green bond is a type of financial instrument designed to raise
capital specifically for projects and activities that have positive
environmental and climate benefits.
u These bonds are issued by governments, corporations, and other
organizations to fund projects that aim to address climate change,
promote sustainability, and mitigate environmental impacts.
u Investors are drawn to green bonds not only because they support
environmentally friendly projects but also because they can
diversify their portfolios and align their investments with their
values.
u To ensure transparency and credibility, issuers of green bonds often
follow certain guidelines and standards, such as the Green Bond
Principles established by the International Capital Market
Association (ICMA).
EXHIBIT 1
Size of the Green Bond Market
1000 800,000

900
700,000
800

Market Value (USD millions)

600,000
700

Number of Bonds
500,000
600

500 400,000

400
300,000
300
200,000
200
100,000
100

0 0
0

0
c-1

c-1

c-1

c-1

c-1

c-1

c-1

c-1

c-1

c-1

c-2
De

De

De

De

De

De

De

De

De

De

De
Number of Bonds Market Value

SOURCE: ICE BofA Green Bond Index. Index code: GREN. Sample period: December 31, 2010, to July 31, 2021.

issued by supranational institutions: the Asian Development Bank, the European

Development Bank, and the International Bank for Reconstruction and Development.
EXHIBIT 3
Currency Composition of the Green Bond Market
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20

Australian Dollar Brazilian Real Canadian Dollar

Euro Turkish Lira South African Rand
Swedish Krona US Dollar British Pound

SOURCE: ICE BofA Green Bond Index. Index code: GREN. Sample period: December 31, 2010, to July 31, 2021.
EXHIBIT 5
Maturity Composition of the Green Bond Market
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20

0–3 Years 3–5 Years 5–7 Years 7–10 Years ≥10 Years

SOURCE: ICE BofA Green Bond Index. Index code: GREN. Sample period: December 31, 2010, to July 31, 2021.

Among the first green utility bonds included in the index were Electricité de France
EXHIBIT 10
Historical Total Returns
140

135

130

125

120

115

110

105

100

95
4

1
t-1

r-1

t-1

r-1

t-1

r-1

t-1

r-1

t-1

r-1

t-1

r-2

t-2

r-2
Oc

Ap

Oc

Ap

Oc

Ap

Oc

Ap

Oc

Ap

Oc

Ap

Oc

Ap
Green Bonds Global Agg Global Gvt Global Corp
Euro Agg Euro Gvt Euro Corp

NOTES: Total returns hedged to USD. Sample period: October 31, 2014, to July 31, 2021. GREN: Green Bonds, GBMI: Global Agg,
W0G1: Global Gvt, G0BC: Global Corp, EMU0: Euro Agg, EG00: Euro Gvt, ER00: Euro Corp.

For credit investors, the excess return relative to duration-matched government

bonds may be more important, as it reflects the additional return on top of a safe
Summary
u There is necessity and demand for green technology in current time.
u The green technology can mitigate the impacts of climate change,
reduce pollution, conserve natural resources, and create a more
sustainable future.

u The green bond have been developed to finance the green technology.
u The green bond market has grown spectacularly over the past decade.