@article {Gyurajai.2020.1.098, author = {Gabor Gyura}, title = {Green Bonds and Green Bond Funds: The Quest for the Real Impact}, elocation-id = {jai.2020.1.098}, year = {2020}, doi = {10.3905/jai.2020.1.098}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Green bonds have so far been celebrated by many as one of the most promising tools to support climate change mitigation via the transition to a low-carbon economy. Green bond funds have so far not kept pace with green bonds{\textquoteright} rapidly increasing volumes, which paradoxically also means that such funds could have a high growth potential, especially if changing investor attitudes are also taken into account. Such funds are well placed to meet Millennial investors{\textquoteright} demand for both impact investment opportunities and more information on the tangible benefits of their investments. This article argues, however, that impact reporting appears to need further refinement in terms of comparability and the underlying methodologies. Moreover, even if some green bonds individually come with measurable environmental gains, it remains doubtful whether they lead to proportionately more green projects on a macro level. The survey reported here suggests that there is little additionality in green bonds; the sheer growth of such instruments, therefore, does not mean that the same amount of capital flows to environmental sustainability efforts.TOPICS: ESG investing, portfolio management/multi-asset allocation, portfolio theory, portfolio constructionKey Findings{\textbullet} Green bond funds so far have not kept pace with the rapid growth of the green bond segment. These funds hold great growth potential to meet increasing impact-driven investor demand.{\textbullet} Even though green bond fund managers can make use of fairly informative impact reports of the underlying green bonds, there is clear room for improvement in the comparability of the reporting frameworks, so as to incentivize the maximization of impact.{\textbullet} This survey among green bond issuers indicates little additionality in these instruments; the rise of green bonds is unlikely to come with the same amount of new net capital inflows to green investments. Most issues instead serve communication purposes.}, issn = {1520-3255}, URL = {https://jai.pm-research.com/content/early/2020/04/22/jai.2020.1.098}, eprint = {https://jai.pm-research.com/content/early/2020/04/22/jai.2020.1.098.full.pdf}, journal = {The Journal of Alternative Investments} }