OREANDA-NEWS. Given the rapid growth of the green bond market, investors are facing a high number of different green bond concepts and issuers. This raises the crucial question of the respective sustainability quality.

Recently, oekom research rated different green bonds. This is said to help investors to identify the green bond that corresponds to their own responsible investment approach.

"KfW’s green bonds are very straightforward, being exclusively dedicated to renewable energy financing and strictly excluding nuclear power and fossil fuels. KfW has implemented a quarterly reporting cycle, including a transparent breakdown of use of proceeds by category as well as verified results of impact analysis. Proceeds are almost exclusively allocated to wind power projects in the European Union, resulting in high environmental benefits and very limited risks. There is, however, a small share of proceeds invested into not further specified renewable energy types. As such, there is some uncertainty regarding the potential eligibility of large hydropower and potentially controversial biofuel projects. As investments through KfW’s green bonds almost exclusively take place in EU countries with comparatively high social and environmental standards, there is only a low risk of controversial financing within the eligible categories. More information on guidelines and criteria applied in the selection and evaluation of projects and a more comprehensive reporting on the project level would add to the sustainability quality of KfW’s bonds."