January 27, 2017
Green bonds are bonds that companies, governments, and municipalities can issue to raise capital for new or existing projects with environmentally sustainable benefits. Clarifying what constitutes an environmentally sustainable benefit is difficult because there is no regulation regarding a definition for the term.
At the end of 2016, green bond issuance reached more than $80 billion, which represents close to a 100% year-on-year growth. In 2017, some believe the green bond market will continue to grow rapidly, not only to become more environmentally responsible, but also to address public health issues, such as air pollution in China. As the green bond market continues to grow, clarity regarding what makes a green bond “green” will be increasingly important.
At Green Century, we work closely with our subadvisor of the Green Century Balanced Fund to ensure that the green bonds we invest in on behalf of our investors are truly making a positive environmental impact. We do this in two key ways:
- Actively searching for green bonds that comply with the Green Bond Principles (GBP)
The Green Bond Principles are voluntary process guidelines that provide bond issuers guidance for launching credible green bonds. The guidelines consist of four main components: use of proceeds, process for project evaluation and selection, management of proceeds, and reporting. By providing a standardized set of guidelines that promote transparency and disclosure, broader market participants, such as investors, are more easily able to compare and contrast information necessary to evaluate the environmental impact of their green bond investments.
- Investing in only those green bonds that meet the specified environmental, social, and governance criteria as outlined in our prospectus
Each green bond we invest in is subject to a fundamental analysis and in-depth research process that highlights those potential investments with the strongest environmental, social, and governance characteristics. In addition to seeking out investments that will encourage renewable energy, clean water, and climate change mitigation, the research process also investigates issues regarding human rights, animal welfare, workplace discrimination and safety controversies and recent or ongoing corporate governance controversies.
We believe that green bonds play an essential role in our holistic sustainable investment strategy and that the capital raised through these investment instruments will help achieve and accelerate our transition toward a more sustainable economy.
To learn more about the Green Century Balanced Fund and how we seek to invest in green bonds that support energy efficiency and emissions reductions programs through domestic and international corporations and agencies, please visit the Green Century Balanced Fund webpage, email email@example.com, or call 1-800-934-7336.
You should carefully consider the Funds’ investment objectives, risks, charges and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds, please click here, email firstname.lastname@example.org or call 1-800-934-7336. Please read the Prospectus carefully before investing.
Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to risks including interest rate, credit, and inflation. The Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria.
This information has been prepared from sources believed to be reliable. The views expressed are as of the date of this writing and are those of the Advisor to the Funds.
The Green Century Funds are distributed by UMB Distribution Services, LLC. 1/17