The digital transformation of the global green bonds market: New-fashioned international standards for a new generation of financial instruments

Post-pandemic economic recovery plans favour sustainable growth and resort to the issuance of sustainable bonds, which is expected to increase exponentially in the following years. The challenge will be to build a credible, efficient, and transparent green bond market to drive the global green transition. Digitalization and standardization have the potential to accelerate this process in the post-COVID era, as they enhance transparency and verifiability in the green bond markets. Factors such as the multicity, complexity, and lack of comparability of environmental, social, and governance (ESG) standards and objectives can be addressed through the standardization of the ESG indicators and the methodology for impact reporting. In addition to this, digitalization can increase the reliability of sustainability reporting and help attract responsible investors who increasingly favour sustainable projects and invest their funds accordingly. The next big challenge will be creating a new breed of fully digitalised green bonds, using blockchain from its issuance until the reporting phase, which in the case of green bonds covers both the use of proceeds and the proof of impact. Combining digitalization with international standardization will further allow the scaling of green bond markets to meet the growing demand.