In the world of municipal bonds, ESG and Green bonds are all the buzz. So, what exactly are these bonds, how are they issued and do they offer the benefits that they are hyped up to be? This article intends to look at these very issues, and more.

The term ESG bonds stands for environmental, social and governance bonds. ESG bonds are a type of debt instrument in which an issuer has identified certain environmental, social or governance criteria for the use of the bond proceeds. ESG bonds can be issued for a wide variety of types of projects. Examples of projects funded with ESG bonds by municipalities, authorities, school districts, colleges and universities include renewable energy, smart infrastructure and clean transportation.