Green Bond

AAA

DEFINITION of 'Green Bond'

A tax-exempt bond which is issued by federally qualified organizations and/or municipalities for the development of brownfield sites. Brownfield sites are areas of land that are under utilized, have abandoned buildings, or are under developed. They often contain low levels of industrial pollution.

Green Bonds are short-hand for Qualified Green Building and Sustainable Design Project Bonds.

INVESTOPEDIA EXPLAINS 'Green Bond'

These bonds are created to encourage sustainability and the development of brownfield sites. The tax-exempt status makes purchasing a green bond a more attractive investment when compared to a comparable taxable bond. To qualify for green bond status the development must take the form of any of the following:

1) At least 75% of the building is registered for LEED certification;
2) The development project will receive at least $5 million from the municipality or State; and
3) The building is at least one million square feet in size, or 20 acres in size.

RELATED TERMS
  1. Social Responsibility

    The idea that companies should embrace its social responsibilities ...
  2. Green Economics

    A methodology of economics that supports the harmonious interaction ...
  3. Green Fund

    A mutual fund or other investment vehicle that will only invest ...
  4. Green Investing

    Investment activities that focus on companies or projects that ...
  5. Dow Jones Sustainability World ...

    A global index consisting of the top 10% of the largest stocks ...
  6. Surrender Period

    The amount of time an investor must wait until he or she can ...
Related Articles
  1. Bonds & Fixed Income

    Green Bonds: Fixed Returns To Fix The Planet

    Fixed-income investors are no longer left out of the green investing revolution.
  2. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  3. Personal Finance

    Go Green With Socially Responsible Investing

    Find out how morals and ethics can bring you a surprising return.
  4. Bonds & Fixed Income

    5 Basic Things To Know About Bonds

    Learn these basic terms to breakdown this seemingly complex investment area.
  5. Personal Finance

    Building Green For Your House And Wallet

    The earth-smart money is on these environmentally friendly housing projects.
  6. Investing

    What is socially responsible investing?

    In the financial world, where profit and return are often the priorities of the average investor, the vehicles we use to reach our monetary goals can be overlooked. We know that mutual funds ...
  7. Options & Futures

    Writing Covered Calls On ETFs

    The strategy of writing covered calls on ETFs can limit your losses and hedge risk, but they cap your upside potential.
  8. Bonds & Fixed Income

    What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields move in opposite directions.
  9. Taxes

    Why should I keep records on my tax-exempt bond transactions?

    Keep your purchase records on all investments, including tax-exempt bonds. Though the interest is tax-free, you may owe taxes if you sell your bond for a gain.
  10. Bonds & Fixed Income

    What causes a bond's price to rise?

    Learn about factors that influence the price of a bond, such as interest rate changes, credit rating, yield and overall market sentiments.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center