CHAPTER-1: INTRODUCTION

1.1-INTRODUCTION TO THE TOPIC:-

A Green bond and climate bonds have received increasing attention over the past
few years as key Instruments to finance the transition towards a low-carbon
economy. From being a niche at its creation In 2007, the market has grown
significantly, with new types of investors and issuers participating in Its expansion.

Green bonds offer several benefits for issuers, investors, and policymakers. For
issuers, green Bonds align with long-term project maturities, reduce debt financial
expenses and Improve firm-level environmental footprints and financial
performance. Investors can Better support their investment strategies with
additional information on issuers’ sustainability plans and increase their exposure
to less volatile instruments , which is appealing to Both traditional profit-seeking
investors and socially responsible investors .Thus, issuance has risen from USD
1.5 billion in 2007 to USD 389 billion of outstanding bond volume In 2018 . This
shift has mobilized substantial capital to finance clean energy and efficiency
Energy projects mostly. However, the tangible contribution of green bonds for
channeling investment Into climate change mitigation and adaptation projects has
so far been marginal (Noor 2019).

There is a critical need to reinforce confidence in the green bond market and gain
a better Understanding of the financial characteristics and challenges associated
with this asset class. The academic literature has focused on the macroeconomic
conditions affecting the green bond market and its growth determinants,
highlighting in particular the link between national development contributions and
green bond issuance volumes (Tolliver et al. 2020). Moreover, several empirical
works examined green bond pricing (Flamer 2018; Karpf and Mandel 2017;
Packer and Ehlers 2017; Reboredo 2018; Zerbib 2018), with a primary focus on
the “green bond Premium”. Previous research has also considered the risks that
issuers are attempting to remedy and the environmental integrity of green bonds
(Shishlov and Morel 2016). There remains a need to examine in detail the critical

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barriers to the scalability of the green bond market. This paper explores the
specific challenges faced by different types of stakeholders and is based on a
unique holistic methodology. Our approach combines an analysis of market prices
for green bonds, a thorough revision of the latest literature, combined with primary
data coming from interviews with eleven experts, including investors, issuers, and
intermediaries, such as banks and consulting firms. This research on green bonds
contributes to at least two growing currents of research, namely corporate social
responsibility and sustainable investing. The present paper aims at bridging the
gap of reliable information on the lack of scalability of the green bond market and
offers, to the best of our knowledge, the most comprehensive analysis of those
barriers. We answer questions such as: what are the major barriers that each
category of market participant faces with a green bond issuance? Is there a
standardized process to issue a green bond? What are the perceived versus real
obstacles to the green bond market expansion? Which risks are associated with
green bond issuance for each category of stakeholders? Are green bonds an
accessible instrument—both financially and technically—to fund sustainable
investment? How can policy makers attract bond holders to green investments?

Section 2 summarizes relevant literature on the state of the market. Section 3

presents the drivers of growth by category of market participants. Section 4
identifies the explanatory barriers to scalability. Section 5 suggests policy
recommendations to expand the green bond market. Section 6 presents
concluding remarks. Green bond is a debt security issued by an organization for
the purpose of financing or refinancing projects that contribute positively to the
environment and/or climate. A green bond is alternatively known as a climate
bond. The nascent market for green bonds saw a Growth spurt in 2014 with
issuance tripling from a year earlier, surpassing $38 billion.

The Growth in green bonds comes amid greater Awareness of climate change
and appetite for environmentally-awareness Investment products. The
prevalence of these Securities is likely to rise as they allow issuers and investors
alike to demonstrate their Commitment to environmentally focused

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Initiatives .Bonds labeled ‘green’ signify that proceeds Raised from the issuance
will be tagged for Projects intended to benefit the environment—For instance, the
funds could be used For renewable energy or energy-efficient Endeavors—with
the issuer agreeing to report On the use of proceeds. This is the main factor
Distinguishing green bonds from the rest of The fixed-income market; they are
otherwise Identical to their non-green brethren. To be sure it is important to note
that green bonds only developed in the last decade and occupy a tiny sliver—less
than 1%—of the global fixed-income market. Additionally, the process for labelling
a bond as green is largely unregulated.

Issuers have full discretion to self-label and there is no process for formal
approval or standardized reporting. That said, the surge in issuance in 2014 and
increased investor appetite point to continued growth in this segment. Green
Bonds possess a label signifying that proceeds raised by the bond issue will be
ear-marked or ring-fenced to fund projects intended to benefit the environment
with issuers agreeing to report on the use of Proceeds. These terms are noted
within the bond’s issuing documents. This is the key factor differentiating green
bonds from the rest of the fixed-income market; they are otherwise identically
structured to their non-green counterparts. In line with NEPC’s commitment to
keep abreast of developments and trends in the investment landscape and
educate investors, this paper provides an overview of green bonds and details
important considerations for investors. We believe this area of the market, like any
other, should be analyzed on its merit. To this end, NEPC’s dedicated Impact
Investing Committee, comprising a Cross-discipline team of members from
research and consulting, Will continue to monitor the market and vet investment
Opportunities for clients as they arise.

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 CHAPTER-2. LITERATURE RIVEW

2.1-RIVEW OF LITERATURE

The nexus between the GB and the sustainable economy is traced back to 2023
where the crucial Role of GB in shifting the fossil fuel-based economy to a
greener economy is exhibited to curb the “destination” trend (Mathews, 2022).
The GB is also referred to as a climate bond or sustainable Bond, and it was
highlighted that climate bonds, as a new finance mechanism, urged for its
Deployment towards green projects where the active involvement of private
parties and banking Companies is highly encouraged (Bricking, 2023 Mathews
& Kidney, 2022). Interestingly, the UN Paris Accord in its Climate summit in 2023
stressed the importance of GB in achieving a green Economy, since then the
growing literature on GB has increased accordingly (McInerney &
Johannsdottir, 2023).As far as flourishing literature on GB (Pham, 2023) with
the notion of the volatility of GB, Conducted a first empirical study on market
volatility and found higher volatility in the label GB Segment due to the spillover
effects from conventional bond markets. Henceforth, this piece of Work
contributed to the initial growth of this market and accordingly laid a successive
step for Future studies. Since then, many researchers further investigated the
market volatility and con-Tributed to this body of knowledge by inferring the GB as
a risk alleviating tool (Bilgin et al., 2018; Gatti & Florio, 2018; Jiang & Jia,
2022; Jin et al., 2020; M. Liu, 2022; Mensi et al., 2022; Ortolano & Nissi, 2022;
Ren et al., 2022; Uddin et al., 2022; Wulandari et al., 2018; Yaya et al., 2022).
It is likely Noted that the extant literature deeply focused on GB market benefits
brought to investors through Portfolio diversification which in turn assists the
various investors to take proper trading strategies With a better understanding of
this green (Chatziantoniou et al., 2022; Gianfrate & Peri, 2019; Huynh, 2022;
Huynh et al., 2020; Karim & Naeem, 2022; Rao, 2022; Sohag et al., 2022;
Tsagkanos Et al., 2022). With the increased concerns about the perceived
behavior of the stock market Towards eco-friendly tools, the other facets of the
studies dealt with stock market reactions to GB announcement and succeeded in

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the dissemination of positive reactions from the market and Strongly justified that
the market reacts positively towards issuance with a signaling quality of Issuers
for their environmental commitments which further enhanced the issuance quality
of GB (Bancel & Glavas, 2023; Baulkaran, 2023 Laborda & Sánchez-Guerra,
2021; Mohd Roslen et al., 2023; Tang & Zhang, 2023Wang et al., 2022). It was
a well-observed fact that the majority of the

Studies done from the demand side of GB, whereas only limited studies have
investigated GB Market from the supply-side perspective (Barua & Chiesa, 2019;
Chiesa & Barua, 2019; Dou & Qi, 2021 & Colombage, 2019; Russo et al.,
2021; Tolliver et al., 2019).With the growing interest in GB return comparison to
convention bonds, major strands of Literature was focused on the “Greenium”, the
yield difference between green and conventional . bond (Bachelet et al., 2019;
Deng et al., 2020; Hyun et al. Larcker & Watts, 2020; Nanayakkara &
Colombage, 2019; Partridge & Medda, 2020), where strong evidence on the
“greenium” was found with the existence of lower yield on GB against
conventional bond (Agliardi & Agliardi, 2021; Dorfleitner et al., 2022; Huynh et
al., 2022; Lau et al., 2022; Löffler et al., 2021;.MacAskill et al., 2021; Teti et
al., 2022). In the notion of GB and its impact on environmental performance, the
studies shed light on ESG activities which demonstrated the favorable benefits
(Fatica & Panzica, 2020; Glomsrød & Wei, 2018; Oguntuase & Windapo,
2021; Zhou & Cui, 2019). As the global financial markets witnessed instability
due to the pandemic, recent studies were conducted on GB and its behavior with
other forms of markets. It is likely noted that the GB is termed as a better
investment avenue for investors during pandemic times with their increased return
and demand due to its financial and non-financial benefits (Hacıömeroğlu et al.,
2023)

2.2 GAP ANALYSIS:

The reviewing the ability literature on the green projects of the policy makers and
investors are successfully in India. A gap was identify in terms of limited research carried
out to study the unlocking the green board potential in India with special references green

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bond market in India. Hence the objective of the research was set according to identify
research gap. Research objectives are showing in chapter 4.

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 CHAPTER-3.THE GREEN BOND HYPOTHESIS
In this section, I provide the conceptual underpinnings of the green bonding
hypothesis. Istart with existing problems that give rise to the need for commitment
devices for environmental performance, and then I discuss specific mechanisms
related to green bonds that

Allow them to act as a commitment device.

3.1 The rising stakeholder emphasis on climate change

In recent years, concerns about climate change have grown and stakeholders
have increasingly pressured firms to internalize their environmental impact. While
these stakeholder preferences translate to higher climate change risk exposure,
they also create green opportunities for firms better at managing their
environmental impact.

Governments have begun to introduce corporate regulation to address climate

change.

According to the World Bank’s 2020 data, there are 60 carbon-pricing initiatives
implemented or scheduled that cover 46 national jurisdictions and 21.3% of global
greenhouse gas emissions (World Bank, 2020). Carbon taxes reduce the future
earnings of firms with higher carbon emissions and thus lowers the net present
value of these firms. Investors are also increasingly considering ESG in their
investments (e.g., Hartzmark and Sussman, 2019; Krueger et al., 2020; Bolton
and Kacperczyk, 2020). Investors representing over $100 trillion in assets under
management have signed the Principles for Responsible Investment (PRI, 2020).
This is an example of investors having a taste for certain assets, and investors
with these preferences demand a lower expected return for holding firms with
better environmentalperformance (e.g., Fama and French, 2007; Friedman and
Heinle, 2016; P´astor et al., 2020).

Finally, growing evidence points to consumers and employees considering climate

change when making purchase or career decisions (Greening and Turban, 2000;

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Laroche et al., 2001; Drozdenko et al., 2011; Barrage et al., 2020; Homanen,
2018). Thus, stakeholder pressure translates to lost revenue and lower market
value for firms with a poor environmental impact.

Firms that can manage their environmental impact and credibly communicate their
environmental commitments can turn climate change risks into opportunities.
Exposure to climate change risk increases the marginal benefit of investing in
green projects that lower carbon emissions. Because of this shift in marginal
benefit, some green projects become positive NPV, and more firms would
communicate their environmental efforts in an attempt to capture these new
opportunities. For example, Grewal (2019) finds that firms increasingly disclose
about green opportunities in annual reports and sustainability reports. Another
example is the emergence of the Carbon Disclosure Project (“CDP”), where by
year 2019, over 2000 firms voluntarily provided disclosure about their
environmental efforts and performance. Additionally, during the climate change
week in September 2019 alone, over 50 firms announced their commitment to
setting science-based emissions targets (UNFCCC, 2019).

However, the extent to which a firm’s environmental commitments are credible

remains

an open question. For example in January 2020, Microsoft released a statement

titled, “Microsoft will be carbon negative by 2030” (Microsoft, 2020). Hours after
the announcement, however, Microsoft’s corporate center in Fargo, North Dakota,
began running on fossil fuel generators because of a cheaper energy
arrangement with local electricity providers (Gold, 2020). As the media covering
this story pointed out, meeting targets may be harder than setting them. In the
next section, I discuss reasons that limit the credibility of firms’ environmental
commitments.

3.2 The lack of credible commitments over environmental

performance

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Given rising stakeholder concerns about climate change, many firms attempt to
communicateTheir efforts to manage their environmental impact. Existing
literature, however, shows little evidence that communication about firms’
environmental efforts is trustworthy. In this section, I discuss how credibly
disclosing environmental commitments is difficult where there are weak
institutional structures that hold firms accountable to their environmental
promises.

Prior literature documents mixed evidence on the credibility of CSR disclosures

and commitments. When comparing environmental performance and
environmental disclosure, Ingram and Frazier (1980) find no correlation, Cho and
Patten (2007) find a negative correlation, and Clarkson et al. (2008) find a positive
correlation. More recently, studies looking at global CSR initiatives find that
signatory firms do not perform better in terms of CSR (Kim and Yoon, 2020;
Raghunandan and Rajgopal, 2020). While inconclusive, there is limited evidence
that firms’ environmental commitments are credible.

One challenge in communicating an environmental promise is the lack of robust

disclosure regulations and complementary institutional frameworks. In most
countries, environmental disclosure is still voluntary, and even where a mandate
exists, the disclosure requirements are relatively loose compared to well-
established financial accounting rules.1 Furthermore, Christensen et al. (2019)’s
recent survey of the CSR disclosure literature suggests that institutional
complementarities impose constraints on what CSR disclosure mandates can
achieve.

Without well-defined standards, it is difficult to determine which activities are

green. Without strict enforcement, it is difficult to track firms’ environmental
performance after making environmental commitments. Without monitoring
agents, it is difficult to hold firms ac countable when environmental promises are
violated.

This concern about weak institutional infrastructure is similar to one reason

foreign firms cross-list in the US under the bonding hypothesis. Specifically, the

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bonding hypothesis suggests that foreign firms from countries with weaker
financial regulation cross-list in thus as a way to commit to limiting insider
expropriation of firm resources by subjecting themselves to the higher disclosure
and regulatory standards in the US (Coffee Jr, 2002; Doidge et al., 2004).2 Firms
that cross-list forgo insider benefits in exchange for cheaper external financing to
capture growth opportunities. These tend to be firms with growth opportunities,
and subsequent to cross-listing, these firms are more likely to raise equity in their
home countries, and receive a lower cost of capital (Doidge et al., 2004; Reese Jr
and Weisbach, 2002; Hail and Leuz, 2009).

Analogously, in the green bonding hypothesis, firms benefit from polluting

activities, but some firms commit to lower pollution in order to access green
opportunities. Pollution is a negative externality where the cost of pollution is not
borne by the firm. This means that the firm extracts private benefits from
environmental resources without paying for theconsequences. Some firms with
green opportunities may find it beneficial to forgo this private ,benefit. This tradeoff
is not beneficial to all firms, as access to green opportunities vary by firm and by
industry. For example, an utilities firm facing carbon-pricing regulation or investor
pressure may find it efficient to convert to renewable energy, but this conversion
may be too costly for an oil and gas company. To benefit from green
opportunities, firms need to forgo their private benefits from pollution, which is
challenging to commit to without the institutional support that allows for credible
disclosure.

To illustrate this tension, consider a scenario analogous to the model in Stein

(1989), where managers face market pressure to boost short-term earnings.
Consider an utilities firm with an opportunity to lower carbon tax if it reduces its
carbon emissions. To cut emissions, the manager of the utilities firm can invest in
a renewable energy plant, which is costly in the short run but value-enhancing in
the long run. Thus, it is in the manager’sbest interest to invest in this project, and
she will communicate this plan to the market and commit to lowering carbon
emissions. However, after making this promise, the managerhas an incentive not

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to invest in this green project because it lowers short-term earnings,and because
green projects are relatively unobservable without institutional frameworks to
monitor them, the market cannot tell whether the firm’s lower earnings are due to
the green project or poor fundamentals. Recognizing this incentive, the market is
not convinced by the manager’s environmental target, and does not price the
green opportunity. Using Stein(1989)’s language, the manager is trapped in a
prisoner’s dilemma and the green opportunity Is lost.To realize the green
opportunities, firms need to be held accountable for their environ-Mental
commitments. With the growing need for environmental change in a world
withLimited public regulation on monitoring environmental commitments, private
mechanisms May arise in order to fulfill the demand for accountability. The green
bond is one such marKet invention, and in the next section, I discuss the green-
bonding mechanisms that makeGreen bonds a credible commitment device.

3.3 Green bonds as a commitment device

In this section, I provide institutional details on how green bonds function as a

commitment. Use of financial instruments to bond firms to institutional oversight of
their environmentalPerformance. These institutions provide reporting standards,
enforcement, and monitoringIn order to hold firms accountable to their
environmental claims, making it costly to deviate.According to the Green Bond
Principles (“GBP”) issued by the International Capital Market Association, green
bonds are “any type of bond instrument where the proceeds will Be exclusively
applied to finance or re-finance, in part or in full, new and/or existing eligible
Green Projects and which are aligned with the four core components of the GBP”
(ICMA, GBP states that these green projects should contribute to the firm’s
environmen-tal sustainability objectives and should provide clear environmental
benefits. The Climate Bonds Initiative (“CBI”) provides a detailed green taxonomy
that defines what constitutes a green project. Since firms can use general
corporate cash to pay back green bonds, the financial credibility of green bonds is
similar to that of conventional bonds. As such, we can think of a green bond as a
conventional bond with a promise to spend a minimum amount on green

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projects.3 This promise is credible because the issuer is bonding to increased

reporting, enforcement, and monitoring, which I refer to as the three

green-bonding mechanisms.

The first green-bonding mechanism is the commitment to provide

periodic reporting inaccordance with international standards. GBP
provides guidance on reporting practices for green-bond issuers, stating
that “the annual report should include a list of the projects to which Green Bond
proceeds have been allocated, as well as a brief description of the projects and
the amounts allocated, and their expected impact” (ICMA, 2018). When issuing
gree bonds, firms often discuss their reporting commitments in the prospectus and
in the green bond framework. For example, Appendix B shows that Apple’s green
bond framework includes the following claim: “Throughout the term of the green
bond, until the proceeds have been fully allocated to eligible projects, Apple
commits to publishing annual updates of the allocation of the proceeds and impact
of projects that have received allocations.” Apple also lists key performance
indicators for its impact disclosure, including greenhouse gas emissions avoided,
energy reduction, and water reduction. To provide additional credibility for these
promises, Apple commits to an annual third-party compliance review of its green

bond framework.

The second green-bonding mechanism is enforcement. There are two main

institutions that fulfill this role: external reviewers and green-bond segments of
stock exchanges.

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 CHAPTER-4. DISCREPTION OF THE STUDY

4.1-MEANING OF THE STUDY

‘Green bonds’ are the fixed income financial instruments that are linked to
promoting and implementing climate Change and environment solutions. With this
instrument, the issuer of the green bond gets the capital to finance Green projects
while the investors receive fixed income in the form of interest. When the bond
matures, the principal Is repaid. In a way, green bonds are the same as any
corporate, in fact they are a subset of corporate bonds, where the use of proceeds
are pre-allocated to a green activity. The first green bond was issued in 2007 by
the European Investment Bank, underwriting €600 million under the label ‘Climate
Awareness Bond’, as a structured bond with Proceeds dedicated to renewable
energy and energy efficiency projects. Since then, the market has witnessed over
50% compound annual growth rate (CAGR), and it continues to evolve Into a
mainstream subset of the broader fixed income market. The global green bond
market has grown from $34 Billion in 2014 – to $41 billion in 2015 – to $81 billion
in 2016 – to more than $120 billion in 20171. Over the years, The market has
expanded significantly in terms of breadth—scope, average issue size, issuer
diversity, investor Diversity, credit ratings, review and indexes; and depth—repeat
issuers, larger tranches, and a growing base of Institutional investors.But when
seen in comparison to the global debt market, green bonds continues to constitute
a small fraction of it—Close to 1%, indicating a massive potential for the market to
grow volume and scale in the green bonds market is Crucial to attract vast base
of investors towards this niche segment. In this context, there is an imperative
need to build confidence in the green market through careful balancing of market
risks and liquidity.

4.2- OBJECTIVE OF THE STUDY

Green bonds enable capital-raising and investment for new and existing projects
with environmental benefits. The Green Bond Principles (GBP) seek to support

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issuers in financing environmentally sound and sustainable projects that foster a
net-zero emissions economy and protect the environment. GBP-aligned issuance
should provide transparent green credentials alongside an investment opportunity.
By recommending that issuers report on the use of Green Bond proceeds, the
GBP promote a step change in transparency that facilitates the tracking of funds
to environmental projects, while simultaneously aiming to improve insight into
their estimated impact. The GBP, updated as of June 2021, are voluntary process
guidelines that recommend transparency and disclosure and promote integrity in
the development of the Green Bond market by clarifying the approach for
issuance of a Green Bond. The GBP recommend a clear process and disclosure
for issuers, which investors, banks, underwriters, arrangers, placement agents
and others may use to understand the characteristics of any given Green Bond.
The GBP emphasise the required transparency, accuracy and integrity of the
information that will be disclosed and reported by issuers to stakeholders through
core components and key recommendations.

In June 2022, Appendix 1 of the GBP was updated to make a distinction

between “Standard Green Use of Proceeds Bonds” (unsecured debt obligation)
and “Secured Green Bonds” and to provide further guidance on green covered
bonds, securitisations asset-backed commercial paper, secured notes and other
secured structures.

4.3-ADVANTAGES OF THE STUDY

•These bonds have criticism with regard to their end-use of proceeds by the
issuer be Bonds in the fixed-income security category are gaining importance
among retail investors because of their great features. It

comes with a host of advantages.

Here we will discuss some of the advantages that may encourage you to
include bonds in Your portfolio.

• Lower initial investment

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You can start investing in bonds with a minimum amount as low as Rs 1000/-
(face Value). You can increase the amount in multiples of face value. There is no
limit to the maximum investment amount in bonds.

• Better Returns

Bonds are known to off er better returns than banks FDs and other investment
instruments. A few bonds offer returns in the range of 7 to 14%. The AAA-rated
bonds are also offering returns in the range of 6-9%

annually.

• Predictable and Stable Income

You get the benefit of income which is Predictable. Also, you can earn stable
returns If the bond is held till maturity. As a bondholder, you get periodic interest
Payments payable monthly, quarterly, half-earl , or year based on the terms of
bonds.

• High liquidity

Bonds offer high liquidity compared to FDs as it helps you buy or sell them with
great ease in the secondary market. It is known to Provide the advantage of
selling bonds without a substantial change in price.

• Risk-reward ratio

Bonds always have a favourable reward ratio as compared to other asset classes.
It enjoys a higher return compared to fixed deposits at almost the same risk while
it is much safer than equity with equivalent compound returns.

• Capital Protection

In the volatile stock market, capital Protection is a major concern specifically for
Risk-averse individuals. Bonds are known to Provide capital protection, safety,
and Liquidity under all circumstances. Under the Same category, government

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bonds and AAA-Rated bonds are considered to be the safest and the degree of
safety goes down with Lower ratings.

• Portfolio diversification

Bonds can help you diversify your portfolio and balance the risk-reward involved
with different assets. It can also prove to be a great addition to your investment
portfolio.

• Tax Benefit

A few specific types of bonds can help you and reduce your tax burden. Tax-
saving bondsmzlii Enjoy special privileges under Section 80CCF of the Income
Tax Act. Investment in tax-free incom.

4.4- DISADVANTAGES OF THE STUDY

These are the disadvantages of green bond market:-

cause of several reasons. There were instances when the end-use did not fall
under the green category. And the public has been misled.

•Under-developed financial markets may not be conducive to the development of

such bonds.

There are no proper rating guidelines for such types of bonds.

•Such bonds may fail to offer liquidity that some investors, mainly institutional
investors, may want at times.

•Such bonds have received criticism for not being diversified enough in terms of
issuers or the countries where the projects are based.

•Non-green investors may not view it as an attractive investment if they expect to

earn more returns from other investment.

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4.5-RATIONALE FOR GREEN BOND:

Given the overall nature of green technologies that have and are likely to enter the
market, fixed income bonds are Particularly well suited to finance them because,

(1) These technologies are largely capital intensive fixed investments in

nature

(2) The technologies generally tend to have low variable cost in the project
lifetime

(3) They generate steady paybacks and low-risk revenue streams over long
periods of time once the investments are up and running.

However, on the other hand, because the technologies are new and novel, risk
reduction on long payments Streams will be critical to enhance the confidence
among investors to enter the market. In this context, several risk reduction and
other innovative models of green bond financing have been experimented with
corporations and Countries including measures such as credit enhancements and
guarantees – that are especially useful. Besides, Aggregation and securitization to
pool risks and generate steady income flows of sufficient scale and size have
Potential and are likely to be well appreciated in long investment markets among
institutional investors. While the green bond market has developed bottom-up,
and largely independent of government regulation, which is one explanation for
the instrument’s vitality and dynamism and the pace of this market’s development.
However, if the instrument is to build trust in its stated purpose and retain investor
confidence, there is a need for some level of standardization in the disclosure and
transparency requirements, and there is a facilitative role the Government is
required to play here. Public policy backing in the form of support, policy
directions, and transparency of guidelines, measurements, and robust standards
could play a very crucial role in strengthening the green bonds market. While a
level of Government intervention is needed, it is also necessary to point out that
this intervention should not make regulatory requirements and taxonomies

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too rigid for the instrument, as this will hamper the innovativeness witnessed with
this instrument across the world and thus effect its growth and climate impact
Potential. In many economies, public sector has been lending confidence in the
green bonds market by issuing sovereign bonds. Currently, the sovereign issuers
have been able to raise close to $ 10 billion towards green investments covering
all major continents – Asia, Africa, Europe, and the Pacific Islands. The countries
which have issued green bonds are Fiji, France, Poland, Nigeria, Indonesia, and
the most recent, as of February 2018, being Belgium. The trend has been
growing, as within a year of the first sovereign green bond issue in as early as
December 2016, the market has seen diverse new entrants of sovereign green
bond issuers. In some other countries, like in China, the public sector has been
advancing the green bond market by introducing robust domestic green bond
evaluation guidelines for the ease of the market players.

4.6- THE INDIAN GREEN BOND MARKET

India entered the green bond market in 2015 with the YES Bank issuing the first
green bond for financing the Renewable and clean energy projects particularly, for
wind and solar. Gradually, the green bond market has Expanded to several public
sector undertakings, state-owned commercial banks, state-owned financial
institutions, Corporates, and the banking sector. The Climate Transparency’s
Brown to Green Report 2017, drew a comparison Across the G20 countries in
terms of their green bond issuance as a share of the country’s overall debt
market.

According to them, among the G20 countries, India ranks fifth. This highlights the
existing scale and future scope In the country to develop and grow green bonds
as an instrument to accelerate green market penetration.

Figure 1: Green Bond Issuance of the G20 Countries (as of 2017)

Source: Climate Transparency Group, G20 Brown to Green Report, 2017 TERI
analysed 25 key green bonds (certified, self-labelled), which have been issued in
India by various players.

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There have been several innovations in the market since the first issue, it is
reflected in the timelines graph depicted

Below. However, the Indian green bond market hasn’t been able to diversify itself
much in the nature of assets for Funding, which are still focused on the ‘pure play’
renewable energy projects.

Figure 2: Green Bond Issues by Issuer Type

Source: TERI analysis

Figure 3: Timeline of Green Bonds in India

Variance in Coupon Rates: Average coupon rate for domestic issuers is

significantly higher—7.5% compared With 4.7% for international issuance. This
significant difference is linked to the currency risk of the Indian Rupee

(INR). Additional hedging costs would need to be considered and accounted for to
make these figures comparable.

In India, the coupon rates for masala bonds ranges from 7% to 10%, and for other
bonds, the range is 2.5%—8%(the spread also indicates the difference between
INR and foreign currency bonds).

Figure 4: Variance in Coupon Rates

versubscription of Bonds: The interest in issuance in green bonds is not

only visible in terms of the growth Of the Indian green bond market, it is also
reflected in the oversubscriptions of some of the bonds. This shows That not only
are the issuers are showing active interest but the investors are also attracted
towards green bonds. The tax-free bond issued by the Indian Renewable Energy
Development Agency Limited (IREDA) in 2016 was oversubscribed by more than
5.1 times.

Issuance Size: The issuance size in India varies from a small issue size bond,
below $100 million issue, to very Large issue size bond ranging to $1 billion.

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Some industry experts have stated that – “small size of the bond issue Generally
works for India3. But when one tries to go international, investors would require
big volume and therefore Are interested in moving towards big issue size”.
Therefore, in order to mobilize the Indian green bond market, and To tap domestic
investors, it would be essential to have a well-developed national exchange and a
domestic certifier For the projects. Together India has raised nearly $7.3 billion in
green bonds (certified and self-labelled) by now.

4.7- POLICIES AND REGULATIONS OF GREEN BOND MARKET

Government support in the form of policies and regulatory support is vital to bring
the green bonds market in India to scale. Over the years, the Government of
India has been providing greater policy visibility and regulatory Certainty in
accordance with commitments outlined in the Paris Agreement which anchors a
clear policy direction Towards the green market. In addition, specific policy and
regulatory measures have also been taken to accelerate The green bond market
in India. Some of them are listed below:

4.7.1The Indian regulator SEBI issued the domestic green bond

guidelines

In January 2016, the Securities and Exchange Board of India published its official
green bonds requirements For Indian issuers making India the second country
(after China) to provide national level guidelines. As per the Guidelines of the
Securities and Exchange Board of India (SEBI), a debt security shall be
considered as ‘Green’ or ‘Green Debt Securities’, if the funds raised through
issuance of the debt securities are to be utilized for project(s) And/or
asset(s)falling under any of the following broad categories:

1. Renewable and sustainable energy including wind, solar, bioenergy, other

sources of energy which use clean Technology, etc.
2. Clean transportation including mass/public transportation, etc.

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 3. Sustainable water management including clean and/or drinking water,
water recycling, etc. There are different Types of definitions and indexes
that can be leveraged:
4. Climate change adaptation
5. Energy efficiency including efficient and green buildings, etc.
6. Sustainable waste management including recycling, waste-to-energy,
efficient disposal of wastage, etc.
7. Sustainable land use including sustainable forestry and agriculture,
afforestation, etc.
8. Biodiversity conservation

4.7.2 SEBI issued circular on disclosure norms in May 2017

In addition to the above, SEBI issued a circular on May 30, 2017, setting out
disclosure norms which would govern .The issuance and listing of ‘green bonds’ in
India (Green Bond Guidelines), in addition to the existing SEBI (Issue

And Listing of Debt Securities) Regulations, 2008 (ILDS Regulations). Within the
guidelines, the scope of definition Of green bonds has been kept wide to include
most types of green projects and SEBI has been empowered toinclude any other
category of projects from time to time. As part of the guidelines, the issuer would
have to make disclosures including use of proceeds, list of projects to which green
bond proceeds have been allocated in the annual report, and periodic filings made
to the stock exchanges.

4.7.3 Union Budget 2018 proposal to consider A-rated bonds for

investment5

One of the most confusing things about bonds is that no two bonds are the same.
For instance, the same company can set up its capital structure differently for two
bonds, offering collateral to back some of its bonds, receive credit enhancement
or guarantee or issue senior or subordinated bonds that have different priorities

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for repayment in a bankruptcy proceeding. Therefore, the role a rating agency
plays is to look closely at individual bonds - and judge the likelihood that the
issuer is able to repay to its investors - and rate them accordingly (along their
specific rating scales) to make the risk assessment profile of the bond, available
to all, in the open market. In the Union Budget 2018, an appeal to consider A-
rated bonds for investments was an important proposal aimed at deepening
India’s corporate bond market. The Hon’ble Finance Minister of India in his
Budget speech said that “corporate bonds rated ‘BBB’ or equivalents are
investment grade.” However, he recognized that in India, most regulators permit
only bonds with ‘AA’ rating as eligible for investment. Therefore, there was an
indication provided to the concerned regulators to consider moving from AA to A
grade ratings. This has relevance for all kinds of investment funds, such as
pension funds, insurance funds, and mutual funds, which invest in corporate
bonds across different schemes. Such a move will allow development of the
corporate bond market in a more comprehensive manner including that of the
green bonds, by witnessing more corporates entering the capital market to raise
funds. For instance, this may allow access to a broader investor class including
insurance companies and mutual funds early on.

4.7.4 The Reserve Bank of India (RBI) introduced corporate bond

measures

The Reserve Bank of India introduced a number of measures in August 2016 that
will help to develop the corporate Bond market in the country. The following are
some of measures undertaken:

a. It raised the ceiling limit for partial credit enhancement to 50% of issue size
from the earlier limit of 20%
b. It allowed banks to issue rupee denominated bonds overseas under the
extant framework of incentivizing Issuance of long-term bonds by banks for
financing infrastructure and affordable housing.
c. In order to encourage activity in the corporate bond market, the RBI
allowed brokers to participate in corporate Bond repo market

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 d. To facilitate direct trading in corporate bonds, RBI in consultation with
SEBI, decided to allow foreign portfolio Investments (FPIs) to transact in
corporate bonds directly without involving brokers.

4.8-Barriers that Impede Green Bonds Growth

While the green bonds segment has undoubtedly been successful in India over
the last three years, especially for A nascent instrument, there is the possibility
that it will soon peak or prove to be ineffective in advancing green Growth, if
certain steps and innovative solutions are not adopted to drive it forward. The key
challenges that the market currently faces are as follows:

1) Lack of concentrated measures to support this nascent

instrument

Green bonds have a huge potential in accelerating climate actions and promoting
sustainable development. However, due to the newness of the instrument and
lack of understanding of all its implications, the average Domestic investor is wary
of investing in these, and perceives them as high–risk investments. This is
especially True if the bond is not issued by one of the more recognized green
sectors such as renewable energy. Further, Especially in India, green projects are
likely to not adhere to the conventionally accepted standards, in terms of Their
returns period, the issuer type and the generally smaller size of projects.
However, financial structuring, such As aggregation and securitization can be
applied to lower risk and enhance the credit profiles of such projects and enable
them to leverage green bonds for financing.To support and drive the segment in
its early stages, there is a need for public intervention. Demonstration of
Innovative models for structuring green bonds by large organizations or
government-supported entities will Greatly help in encouraging such
models.Further, there are many credit-enhancement methods which have been
adopted across the world by governments, Ranging from the creation of
guarantee funds, to issuing of sovereign green bonds, to making such bonds tax-

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Exempt or with lower taxes. There is a need to study global examples and decide
on the most appropriate strategy For driving green bonds in the Indian market.

2) Lack of sector diversification in green bond issuances

Several experts have noted that it is important for the market participants to now
analyse more complex sector and broaden out the use-of-proceeds from the ‘low-
hanging fruit’6 For growth to continue at this pace in 2018, particularly in the
sectors other than renewable energy. There is a large scope for green bonds to
be issued across a wide-range of sectors such as the unconventional investment
sectors like forestry and marine conservation, innovative transport, and new
business models. However, with the limits of traditional bond issuances, it is
difficult to finance such climate projects. Led by development and multilateral
organizations, there have been some novel application of traditional financial
instruments to fund these sectors through bonds. These have involved
partnerships between governments at times and leading corporates in other
cases.

3)Lack of methodologies and frameworks for evaluating diverse

projects in the India contex

There are some fundamental impending challenges in the market, which need to
be addressed to accelerate the Momentum in green bonds. First, there’s still a
lack of accepted taxonomies, defining ‘what is green’ across different asset
classes and

Industries. The range of assets widely accepted as ‘green’ is still limited today,
which encourages issuers and Bankers to be cautious about financing new asset
classes in the green bond market. On the other hand, from the Issuer’s
perspective, no issuer would want to risk their reputation by issuing a bond which
is criticized for not Being adequately green or transformational, particularly due to
lack of availability of a domestic green assessment Framework to rate them in a
transparent and uniform manner. Second, there has been a common market view
that many issuers feel constrained by the requirements of a Green bond market,

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as there has been a significant move towards sustainable and social goals as a
more inclusive Way forward to encompass a broader range of use of proceeds.
The green bond guidelines issued in India by the Regulatory authority, SEBI, has
tried to address this aspect by including a wide diversity of project types within

The taxonomy of green bonds. But currently, there is no available domestic

framework to assess this wide variety Of projects. In addition, with the
transitioning sentiments of the market where the dominant theme for investors Is
changing fast to align them to the broader mandate of sustainability, it has
become important that issuers map Their green bond assessment framework to
the SDGs. Third, we need to understand that there is a need to define a domestic
context while defining green and Evaluating green bonds. This is because
different countries are at a different trajectory of development, and Therefore, their
prioritized green or climate actions may vary from one country to another. .
Organizations such As CICERO and the Climate Bonds Initiative, along with
leading international banks, have been pioneering the Global green bonds market
and have developed global standards for evaluating the green bonds, and has
helped in Providing an excellent start to countries to begin screening projects. But,
beyond this, a more nuanced domestic Framework needs to be developed for
India, building on the broader norms of the Global Green Bonds Principles,

But one which is more aligned to the domestic needs for accelerating the market,
evaluating the use of proceeds, And adhering to the domestic framework for
disbursal of funds. For this growth trend to continue and the green bonds market
to expand, the above listed issues need to be Addressed in terms of policy
support as well as structuring of bonds. In order to minimize the cost of funds, for
Example, various strategies for risk mitigation and credit enhancement can be
considered. In order to provide a Further boost to green bonds, there is a need for
validation of ‘green’ projects. A strong standards and certification Process that
clearly establishes green credentials can mitigate the risk of green washing will go
a long way in Supporting the market in the initial stages and diversifying the issuer

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base. In the next three sections, we discuss these issues and look at innovative
methods adopted world-wide to address.

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 CHAPTER-5 RESEARCH METHODOLOGY
Research comprises creative and systematic work undertaken to increase the stock of
knowledge to devise new applications. It is used to new establish or confirm facts, riffing
the result of previous work,soliv new or existing problems, support ,theorems , or
developed new theory. A research project may also be An expansion on part work in the
field research projects can be used to develop the market research powers to test the
validity of the instruments, procedures or experiments, research may elements of prior
projects or the project as a whole. The primary purpose of basis research depend on
epistemologies, which very considerably both with in and between humanities and
sciences . There are severed from of research : scientific, humanities , artistic , Economic
, social business, marketing practitioner. Research, life , technological research as a
scientific And systematic search for knowledge. One can also define research as a
scientific and systematic research for printed information Only specific topic in fact,
research is an art of scientific investigation the advanced learning’s Dictionary of current
English lays down them learning of research as a careful investigation odd inquiry
specifically third search for new facts in any branch of knowledge.

According to reedman and more research as a systemized effort to gain new

knowledge in short the search for knowledge throw objective and systematic method of
finding solution to a problem is research the systematic approach concerning general and
formulation of a theory is also research. As search the term “research' the systematic
approach concerning generated and the formulation of a theory is also research. As such
the term research refers to the systematic method.

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CHAPTER-6. NEED FOR DOMISTIC GREEN BOND
FARME WORK TO ENHANCE MARKET TRANSPARENCY

6.1-GLOBLE PRACTICE

Ever since the green bond market took off, it has been struggling with the
question of what makes a bond green. In 2013, when the green bond principle
(GBP) came into picture, the market seemed to quickly pick-up around it.

The GBP were designed to be flexible—mainly to avoid giving prescriptive rules

around ‘greenness’. They are Voluntary process guidelines that recommend
transparency and disclosure and promote integrity in the Development of the
Green Bond market. In a way they have standardized the approach for issuance
of a Green Bond globally. Since GBP is not prescriptive in nature, over the years,
several standards and models have been Developed to fill the gap of evaluating
environmental credentials of bonds. In the context of standardizing the credentials
of a green bond, the CICERO, Climate Bonds Initiative (CBI) and Sustainanalytics
have been key actors with their endeavor to create more robust assessments for
these bonds. They provide green bond certification services on the basis of their
methodology and criteria, which adds either Direct or indirect value to the bond
issuance . In addition to them, there are other second party opinion providers —
who evaluate the project’s green eligibilit for funding based on there own
assesment method.On top of all those taxonomies and assessment services,
there is an array of indexes, stock exchange segments, And terminals that come
up with their own criteria for assessing a bond as green. A number of ratings
agencies And financial institutions have created indices to exclusively cover green
bonds. In March 2014, Solactive launched The first green bond index, followed in
July by S&P with their S&P Green Bond Index and the S&P Green Project Bond
Index. Bank of America Merrill Lynch launched their index in October 2014 and
finally in November 2014, MSCI collaborated with Barclays to launch family of
green bond related indices. Each of these indices has various Eligibility criteria for
inclusion of green bonds. However, interestingly over the years, a growing

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number of green bond assessors are viewing the significance of The bonds not
typically referencing them to green bond criteria alone. Increasingly, the Social
and Sustainability Credentials of a bond have become a need of the market.

6.2-GREEN BOND GUIDELINES IN INDIA

As discussed above, SEBI laid out the green bond guidelines in India in 2021.
While SEBI was in the process of Finalizing the guidelines, it invited comments on
the consultation paper to discuss issues around defining a bond As ‘green’. When
the guidelines were released, it was seen to be an incredible step forward to
provide policy Directions to the industry, however the guidelines did not include a
clear definition/or a defining criteria of what Will be considered ‘green’. Instead the
guidelines stated that SEBI shall evaluate all green bond projects from case-To-
case basis. For green bond market to remain a credible financer of projects that
have positive environmental impacts, it Is essential to adequately define what
types of projects are eligible as green. If left to issuers, the definition of ‘green’ can
be interpreted in a wide variety of ways and may cause confusion in the market.
Besides, keeping The definitional requirements open to evaluation from case-to-
case basis also instills a lack of transparency in The market. An elaborate
domestic framework for evaluation of ‘what is green’, within the context of national
Priorities, may be necessary to identify projects that are worthy of being labelled
as green projects. It is important To align these to the global GBP and other
widely used green bond standards, so that there is fungibility between Indian
green bonds and global green bonds and to maintain the attractiveness of Indian
green bonds. Industry Perspectives tell us that such a framework would be helpful
in mobilizing the sector and bringing about clarity in This respect.In China, the
China Securities Regulatory Commission (CSRC) released green bond
guidelines, encouraging the Shanghai Stock Exchange and Shenzhen Stock
Exchange to set up green bond lists and develop green bond indices To further
boost India’s green bond market.Currently, the market players in India adhere to
the global definitions of green and conform to a variety of indexes And
frameworks that are available in the market. But a closer look at the SEBI green

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bond guidelines indicate That for India, an evaluation framework for green bond,
will need to be much wider than the current definitions Available and will be clearly
aligned to the domestic priorities. The following inferences were drawn clearly
from The guidelines provided by the regulator:

1. SEBI Guidelines aligns itself to the three important global

principles—The Green Bond Principle, The Social Bond Principle, and
The Sustainable Bond Principle. Therefore, it is essential to Develop a
domestic Framework which strengthens the guidelines provided by
SEBI.
2. Not all projects listed under SEBI guidelines are only ‘green’:
When investors come to a ‘choice for certainty’ Regarding raising
funding for green bonds, it is essential that the listed projects for which
the bond is raised is ‘overwhelmingly green’. This is where projects
related to clean water, forestry, and climate change adaptation At most
times fail to raise money.
3. Not all green project categories are directly comparable to each
other: For instance, the impact on emissions Per unit of investment
from setting up renewable energy projects is not the same as that of low
carbon public Transport, although both may lead to a green impact.
Therefore, some weightages along the different categories Listed by
SEBI will be required in order to substantiate their impact to the
interested investors. This would help In guiding the investors towards
their chosen impact category.
4. Some sectors are complex: Some of the sectors within the SEBI
guidelines are complex sectors and that’s why it is so important to have
strong environmental expertise in this
Industries from a climate perspective.

5. Understanding climate risk and life-cycle is important: To emissions,

but one also needs to consider urban planning, including material used, resilience
to disasters and extreme weather. A binary check box does not reflect the

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sustainability aspect of projects, nor does it account for the relative levels of risk
for each country.

6. Missing local context: While there is lot of merit in having a global verification
and assessment methods, but one can create a global standard for evaluation—
as it does not account for country differences. Some stakeholders are concerned
that given the country’s unique needs, a certification standard should be tailored
to the Indian context, rather than completely adopting the existing international
standards.25 In this context it will be useful to benchmark an India-specific green
rating framework against international standards (perhaps those provided by
Sustainanalystics and CICERO) will helps Indian green bond.

6.3-FUTURE OF GREEN BOND IN INDIA

India’s economy is growing at a very rapid pace with 7%-8% rise every year. In
this race The financial needs are also growing to match the growing economy. In
order to fulfill the goal of Sustainable development, Indian economy is promoting
sustainable financial models. This model Includes market instruments such as
climate bonds and green bonds. The major challenge to make Green bonds and
climate bonds workable in Indian financial market is to make investors view the
Sustainable development objectives lies with the issuance of these instruments.
Also, the Government of India should provide a steady stream of investible green
projects CBI (2018c).Green and climate bonds is an important key for India to
achieve sustainable development Goals. As India is rebuilding, introducing new
and innovative financial instruments are crucial as The proceeds from the
issuance of these instruments serve as a reserve for projects which are having
Environmental benefits.

According to World Economic Forum’s Energy Transition Index 2020,

India ranked 74th Making consistent and measurable progress in the area of
sustainable development Joshi (2023).

6.4- CHALLENGES

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Inspite of so many advantages from the issuance of green bonds, there are
certain Drawbacks of this market in India. Green finance and green products are
at a very young stage. The Issuers are still gaining education regarding the
issuance of green bonds and the use of their Proceeds Sarangi (2022).The size of
the market is very small, and therefore small bond sizes create problems of
Liquidity. Lack of standards and legal enforcement leads to the creation of
reputational risk Complexities for green integrity Jain (2020).The performance of
green bonds depends on the bond market of the country there by efffecting its
demand. India has a sovereign credit rating of BBB, which means a low rating for
any Country. Therefore, to attract international investors, green bonds require
credit enhancement Gupta & Alok (2023).The poor and uncertain regulatory
mechanisms are also impacting the investments in the Renewable energy sector
which in turn impacts demand for green bonds Roy (2023)India’s bond market is
in infant stage even after it is second largest market after China. In Order to
attract investors including domestic as well as international, the focus should be
on the following principal areas:

1. The Reserve Bank of India and Securities and Exchange Board of India should
play important role.

2. The Indian government should formulate policies and principles for certification
of climate change projects.

3. The policy framework should provide incentives to the bond issuer for labelling
their projects as green bonds.

4. The green bonds issued by the government and semi-government institutions

will attract more international

5.Investors to invest in India’ green bond market.

6.India offers great scope for the development of green bond market.

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India offers great scope for the development of green bonds. Its economy is in a
fast mode; Its financial sector is adaptive and transformative; its global linkages
are spreading fast, and its role In global policymaking is expanding. Though the
current level of its greenhouse emissions is far Less as compared to the
developed markets or even to the big emerging markets like China, its
Commitment to low-carbon growth and various programs that it unveiled in the
recent period show Its determination to pursue low-carbon intensity growth.
India’s banking system is quite big and the Country has vibrant securities markets,
which should augur well for faster growth of the green Bonds market. Its well-
developed regulatory structure and seamless integration with global regulatory
Templates and standards can enable a smooth transition to successfully harness
the potential of Emerging market segments. Though the corporate bond market
remained a challenge in India for Quite some time, greater thrust and focus are
now beginning to create a strong corporate debt Market both in terms of the size
of issuance and the level of trading activity. Notwithstanding this Constraint, the
growing integration of India’s financial markets with the outside world put India in a
distance position to play a important role of green bond market.

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CHAPTER-7.ANALYSIS AND INTERPRETATION

7.1 .Pai Chart:

A pie chart is a type of graph that represents the data in the circular graph. The
slices of pie show the relative size of the data, and it is a type of pictorial
representation of data. A pie chart requires a list of categorical variables and
numerical variables. Here, the term pie represents the whole, and the slices
represent the parts of the whole.

7.2. Meaning Of The Pai Chart

The “pie chart” is also known as a “circle chart”, dividing the circular statistical
graphic into sectors or sections to illustrate the numerical problems. Each sector
denotes a proportionate part of the whole. To find out the composition of
something, Pie-chart works the best at that time. In most cases, pie charts replace
other graphs like the bar graph, line plots, histograms, etc.

7.3.Conditions for applying pai chart

Pie charts have a fairly narrow use-case that is encapsulated particularly well by
its definition. In order to use a pie chart, you must have some kind of whole
amount that is divided into a number of distinct parts. Your primary objective in a
pie chart should be to compare each group’s contribution to the whole, as
opposed to comparing groups to each other. If the above points are not satisfied,
the pie chart is not appropriate, and a different plot type should be used instead.

The values that comprise a whole and the categories that divide the whole
generally come in two major varieties. First of all, is when the ‘whole’ represents a
total count. Examples of this include votes in an election divided by candidate, or
number of transactions divided by user type (e.g. guest, new user, existing user).

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A second type of ‘whole’ is when the total is a sum over an actual data variable.
For example, we might be interested not in the number of transactions, but the
monetary total from all transactions. Dividing this total by an attribute like user
type, age bracket, or location might provide insights as to where the business is

most successful.

7.4.Advantages Of Pai Chart

•It represents data visually as a fractional part of a whole, which can be an

effective communication tool for the even uninformed audience.

•It enables the audience to see a data comparison at a glance to make an

immediate analysis or to understand information quickly.

•The need for readers to examine or measure underlying numbers themselves

can be removed by using this chart.

•To emphasize points you want to make, you can manipulate pieces of data in the
pie chart.

•Display relative proportions of multiple classes of data.

•Pie charts are easily understood due to its widespread use in business and
media

•Pie charts permit a visual check of the reasonableness or accuracy of the

calculation.

•Pie charts are visually simpler than other types of graphs.

7.5.DISADVANTAGES OF THE PAI CHART

OF PAI CHART

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A technical report, there are various types of charts available to represent your
data. For instance, pai chart are ideal for comparing or contrasting discrete data,
while line chart are best for showing continuous data. Pie charts are excellent for
depicting relative data, scatter plots for causal data, and tables for precise data.
Each of these has its own purpose and can help you effectively communicate your
findings.

•Do not easily reveal exact values.

•Many pie charts may be needed to show changes over time.

•Fail to reveal key assumptions, causes, effects, or patterns.

•Be easily manipulated to yield false impressions.

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 CHAPTER-8.CONCLUSION & SUGGESTIONS

8.1CONCLUSION :

Increasing awareness of the negative impacts of climate change is driving an

ever-growing focus on Environmental sustainability among global investors and
the general public. The growth of the GB market and The green premium
phenomena has created the need to review and organize the individual
contributions made In the literature to date. In response, this study has conducted
a systematic literature review with the aim of studies that assert the existence (or
nonexistence) of the green premium or geranium (used interchangeably), on GB
prices in the primary and secondary markets, and that correlate the green
premium With bond characteristics. Moreover, this study investigated the broader
environmental, social, and economic Drivers and detractors governing the green
premium. Although the drivers share synergies; environmental and

Social drivers—in theory—are expected to have the greatest effects on the

demand and future growth Implications for the GB market. Broadly speaking, a
mixed—although marginally positive consensus—exists among the examined
studies That focus on a green premium in the primary GB market. That is, a
portion of investors are willing to pay a Higher price for GBs, and therefore accept
a lower yield for a GB versus a comparable CB. These findings have Practical
implications for issuers and the growth of the GB market in general. Issuers may
benefit from engaging With the GB market to finance low-carbon initiatives at a
lower cost, particularly for government organizations

That engage with GB governance criteria, such as the third-party verification of

bond proceeds. As more issuers Become aware of plausible capital-raising
benefits of the green premium, there are implications for the growth Of the GB
market overall. For academia, this research has implications for bond pricing
theory by suggesting

That future bond pricing should consider noneconomic motives of investors, such
as environmental preferences. The green premium may serve as a positive side

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effect for driving organizational innovation that adapts Operations towards
environmental purposes. These implications are significant across sectors, such
as Innovative financial products (i.e., green mortgages and green insurances) or
practical applications (i.e., green Infrastructure and green building), where
incentives for green credentials may have previously been lacking. Within the
secondary market, the literature provides a more pronounced consensus on a
green premium. The Practical implication of these findings is that investors derive
nonfinancial utility from SRI practices; Furthermore, they offer some compelling
theoretical insights into the future of the GB market and primary issuance pricing.
A consistent green premium in the secondary market could lend pressure to future
primary

market issuance prices, because secondary market prices are an indicator of

what the market will bear. Bond governance characteristics were found to be the
strongest determinant of a green premium. GBs associated with the CBI
certification label, that are of investment grade, and are issued by
government/municipal organisations,were found to be determinants of a green
premium. Because GBs are a relatively new financial construct,

investors may be seeking to reduce their risk profile by focusing on lower risk
assets.

Limitations of the study included a limited sample size, and non-homogeneity of

study particulars; such as time, sample size, bond profile and control variables.
The review focused on the English language only. In future research, these
limitations may be addressed. With the continued growth of the market and
availability of robust data sets, future research may offer an opportunity to apply
multiple regression analyses to predict the plausible GB premium given particular
bond characteristics. The correlation assessment in this study identified a limited
range of possible green premium determinants. Future studies would benefit from
a comprehensive breakdown

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Of green premium determinants, such as geographical region, currency, market
sector, and comparisons of GB standards not covered in this review. As more
data becomes available on GB pricing characteristics, a future

systematic literature review is recommended which engages with a larger sample

size, including a broader scope of languages. As public support grows for action
on mitigating the worst effects of climate change, it is anticipated that the GB
market will continue to establish itself as a critical, impactful step towards meeting
the Sustainable Development Goals established by the United Nations and
continue the economic transformation towards cleaner production.

8.2 SUGGESTIONS:

There Is a need to have an intensified push by the government to the private sector to
issue and invest in bonds. So, a policy of tax benefits to the issuers as well investors can
help overcome the existing need of funds for environmental projects. A system of tax
credit can be framed whereby the issuers do not have to pay interest payments and
instead tax credit be transferred to the bond holders’ account. Another way could be tax
exemption on interest received by the bond holders. Likewise, Capital Gain tax bond
which are currently issued for NHAI and REC can also be issued for renewable energy
projects. Formation of development funds. Just like Rural Infrastructure development
fund, a fund that would help in priority sector lending of renewable energy can be of
great help to raise finance for green needs. Standardization and comparability would give
an unblocked view of what is green and what is not. Credit rating of green bonds-
Moody’s, an International rating agency, launched its green bond rating mechanism in
2016. Therefore, such credit rating assessment be followed not only on the basis of use
of proceeds or reporting but also on analysing if the funds are invested in sound green
projects. Removing the limit of 15 Cr per borrower under priority sector lending by the
banks can be a huge aid to promote green projects. This is mainly because 15 cr is too
small a limit for investment in such projects that require large amount of funds.

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ANNEXURE:

Series-1

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Series-2

INTERPRATION:

The chart represent that 36.4% people can want for environment full of
green plants ,animals and birds 30.3 % people full of building ,motor vehicles and
industries and 30.3 % people both.

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Series-3

INTERPRATION:

In this chart represent that 78.1% people can responses yes to green bond
project are better for our nature and 21.9 people responses no.

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Series-4

INTERPRATION:

This chart represent that 78.8 % people can response solar power
energy can help to polluction free environment 21.2% people
responses electronic energy.

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Series-5

INTERPRATION:

These chart is represent that 45.5% people can response save plant
and trees are the part of green bond projects 21.2% people can
responses clean atmosphere and 21.2% people answer both.

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 QUESTIONNAIR

Dear respondents,-
I am Amber Shain Roll No.-S06920COM077 ,B.com student of
Belpahar Degree college Belpahar, Jharsuguda (Sambalpur University). I am
conducting a survey on “A study on GREEN BOND MARKET : UNLOCKING
THE GREEN BOND POTENTIAL IN INDIA.” In partial fulfillment of degree. I
would request you to please spare a few minutes to fill up the questionnaire and
help me to get the required information. The data to be collected is used for my
academic purpose only and your response is valuable for my research work.
Please feel free to opine. Thank you.

 What is full name ?

 How old are you?
 Gender?
o Male
o Female

1. What you want for environment?

(a)Full of green plants,animals and birds

(b) Full of buildings ,motor vicles and industries
(c) Both

2. is green bond projects are batter for our nature?

(a) yes
(b) no

3.Green projects are harmful for industries?

(a) yes

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(b)no

4.which one is help to pollution free environment?

(a) electronic energy

(b) solar power energy

5. the decision of govt. to make environment green and pollution free for
this project are?
(a) good
(b) bad

6. which is the part of green bond market plans?

(a) beautiful nature

(b) save plant and trees
(c) clean atmosphere
(d) both

7. green project are usefull to

(a) make our environment green and pollution free

(b)make our environment industries and buildings

8. which gas is harmfull for human bings?

(a) carbon dioxide gas

(b) nitrogen gas
(c) both

9. green bond is issued by

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(a) yes bank
(b) world bank

10. do you like the environment around you full of greeny?

(a) yes
(b) no

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 BIBLOGRAPHY
1. https://www.investopedia.com/terms/g/green-bond.asp
2. https://www.ifc.org/wps/wcm/connect/corp_ext_content/
ifc_external_corporate_site/about+ifc_new/investor+relations/ir-
products/grnbond-overvw
3. https://www.weforum.org/agenda/2021/10/what-are-green-bonds-
climate-change/
4. https://corporatefinanceinstitute.com/resources/esg/green-bond/

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