Green bonds have attracted positive results with investors keen to support them. However, the issuance of green bonds is subject to a complex validation process which disincentivises organisations from issuing them, and results in limited availability for investors. Additionally, because of challenges of validation and auditing, the issuance of green bonds outside of low-risk countries creates further barriers, as investors can’t be confident that the outcomes will meet
Blockchain technology offers an opportunity to add transparency and confidence to green bonds, by defining and measuring criteria associated with sustainability that have traditionally required significant administrative effort to measure, in a transparent and low-
administration way. The combination of blockchain technology with business logic, further ensures that confirmation, payments and other events can be tied to firm evidence that sustainability objectives have been achieved, as well as offering the opportunity to solicit additional evidence where required.
Advanced contract technology also offers an opportunity to automate much of the administration underpinning the management of investors in green bonds, including terms, rights and the management of financial transactions.