Green Bond Flashcards

(57 cards)

1
Q

What is the role of Green Finance in risk management?

A

Helps manage climate-related risks while capitalizing on sustainable investment opportunities.

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2
Q

Define Green Finance.

A

Financial investments flowing into sustainable development projects and initiatives.

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3
Q

What are the key terms associated with Green Finance?

A
  • Climate finance
  • Sustainable finance
  • ESG investing
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4
Q

What are the characteristics of Green Finance approaches?

A
  • Transparency through detailed reporting
  • Verification by third parties
  • Measurable impacts on environmental targets
  • Additionality
  • Alignment with international frameworks
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5
Q

What challenges does Green Finance face?

A
  • Greenwashing
  • Measurement difficulties
  • Standardization issues
  • Data reliability
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6
Q

What opportunities does Green Finance present?

A
  • New market segments
  • Innovation in financial products
  • Regulatory incentives
  • Meeting growing investor demand
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7
Q

What are the UN Sustainable Development Goals?

A

17 goals adopted in 2015 providing a blueprint for sustainable development by 2030.

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8
Q

Which SDGs are particularly related to Green Finance?

A
  • Climate Action (Goal 13)
  • Affordable and Clean Energy (Goal 7)
  • Life Below Water/On Land (Goals 14/15)
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9
Q

What are key milestones in the development of Green Finance globally?

A
  • First green bond issuance by the World Bank (2008)
  • Creation of Green Bond Principles (2014)
  • Paris Agreement (2015)
  • EU’s Sustainable Finance Action Plan (2018)
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10
Q

What does the carbon budget concept indicate?

A

How much more CO₂ can be emitted while limiting warming to specific targets.

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11
Q

What are the types of financial risks associated with climate change?

A
  • Physical risks
  • Transition risks
  • Liability risks
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12
Q

What are some opportunities for finance in the context of climate change?

A
  • Financing renewable energy
  • Energy efficiency
  • Sustainable agriculture
  • Climate adaptation projects
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13
Q

What is the purpose of Green and Sustainability-linked Debts?

A

To finance specific environmental projects and improve sustainability performance.

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14
Q

What are the four key components of Green Loans?

A
  • Use of proceeds
  • Process of project evaluation
  • Management of proceeds
  • Reporting
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15
Q

What types of bonds are included under Green Bonds?

A
  • Climate bonds
  • Blue bonds
  • Social bonds
  • Sustainability bonds
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16
Q

What is the Green Bond Principles?

A

Voluntary guidelines on use of proceeds, project evaluation and selection, management of proceeds, and reporting.

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17
Q

What role do Asset-Backed Securities play in Green Finance?

A

Pool smaller green loans to create investment-grade securities.

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18
Q

What is ESG investing?

A

Investing that considers Environmental, Social, and Governance factors alongside financial returns.

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19
Q

What are some examples of equity products for Green Finance?

A
  • Green stocks
  • Cleantech equities
  • ESG-screened indices
  • Thematic ETFs
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20
Q

What types of investment funds support Green Finance?

A
  • Green mutual funds
  • ESG index funds
  • Environmental thematic funds
  • Green ETFs
  • Green private equity/venture capital
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21
Q

What is Greenwashing?

A

False environmental claims made by companies.

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22
Q

What is the significance of the Climate Bonds Standard?

A

Ensures that financial products are certified and consistent with the Paris Agreement’s warming limit.

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23
Q

What are the Equator Principles?

A

Voluntary risk management framework for financial institutions.

24
Q

What is the Green Climate Fund (GCF)?

A

The largest climate fund globally.

25
Fill in the blank: Green finance is designed to protect the natural environment and support the transition to a _______.
[sustainable, low-carbon world]
26
True or False: Green finance primarily focuses on short-term financial gains.
False
27
What is the projected growth of the ESG bond market by 2033?
$4.6 trillion
28
What is the role of the IPCC in climate science?
Provides assessments on climate change and its impacts.
29
What is the main goal of the Paris Agreement?
To keep global warming below 1.5°C.
30
What is the projected warming if current pledges are fulfilled?
1.7-2.1°C.
31
Define Greenhouse Gases (GHGs).
Gases that trap heat in the atmosphere, including: * Water vapor * Carbon dioxide * Methane * Nitrous oxide * Ozone * Synthetic gases.
32
What does Global Warming Potential (GWP) measure?
The relative potency of different greenhouse gases.
33
What is the GWP20 and GWP100 of methane?
GWP20: 80.8; GWP100: 27.2.
34
What are the risks associated with climate change for the finance sector?
Risks include: * Asset impairment and stranded assets * Physical risks * Transitional risks * Liability risks.
35
What is asset impairment?
Loss of value in assets due to environmental factors.
36
What are physical risks in climate change?
Direct damage to human and natural systems.
37
What are transitional risks?
Losses in assets due to technological changes.
38
What are opportunities created by climate change for the finance sector?
Opportunities include: * Investments in climate-resilient assets * Building seawalls * Solar and wind farms * Infrastructure with higher temperature resilience.
39
What percentage of GHG emissions are attributed to the wealthiest 10% of the global population?
51%.
40
What percentage of GHG emissions are attributed to the poorest 50% of the global population?
Under 10%.
41
What does the term 'Inevitable Policy Response' refer to?
Policies that must occur to address climate change but are not currently priced by the market.
42
What is the Singapore Green Plan 2030?
A plan setting targets for financing solar energy, greener infrastructure, and sustainable aviation.
43
What did the Monetary Authority of Singapore (MAS) initiate in 2019?
The Green Finance Action Plan.
44
What is Singapore's updated absolute emissions target by 2030?
65 Mt CO₂e.
45
What is the goal of Singapore's Low Emissions Development Strategy?
To halve absolute emissions by 2050.
46
Define Circular Economy Finance.
Financial services integrating circular economy factors to enable the transition to a fully circular economy.
47
What are the principles of Circular Economy?
Principles include: * Eliminate waste and pollution * Circulate products and materials at their highest value * Regenerate nature.
48
What is greenwashing?
Providing misleading information about the environmental impact of a company's project and operations.
49
What are some examples of greenwashing?
Examples include: * Non-recyclable paper straws marketed as eco-friendly * Drink cartons mixed with plastic but labeled as environmentally friendly.
50
What are the UN Sustainable Development Goals (SDGs)?
Global goals to address various social, economic, and environmental challenges.
51
What is the definition of Green Finance?
Financial initiatives designed to protect the environment and support the transition to a low-carbon world.
52
What does ESG stand for?
Environmental, Social, and Governance.
53
What is a taxonomy in the context of green finance?
A classification system defining what qualifies as green or sustainable.
54
What are the three main categories of climate-related financial risks?
Categories include: * Physical risks * Transition risks * Liability risks.
55
What is the IPCC?
Intergovernmental Panel on Climate Change, the leading scientific body on climate change.
56
What are Nationally Determined Contributions (NDCs)?
Country-specific climate commitments under the Paris Agreement.
57
What is Transition Finance?
Financial support for companies moving toward more sustainable business models.