The appetite for environmental, social, and governance (ESG) investing continues to soar, with record inflows amid the pandemic. Real estate firms are now offering more opportunities for those investors to place their capital. “Green bonds” in particular have risen in popularity dramatically over the decade, from what ULI considered an emerging trend a few years ago to a mainstream investment opportunity in 2020.

Green bonds are standard bonds with specified proceeds going to fund projects that have positive environmental or climate benefits, or both. According to the Climate Bonds Initiative, the majority of green bonds issued are “use of proceeds” or asset-linked: proceeds from these bonds are earmarked for green projects but are backed by the issuer’s entire balance sheet.

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