ECB Head Encourages Green Bond Issue! What is a Green Bond?

 European Central Bank chief Christine Lagarde today said there needed to be a greater incentive to invest in "green" or environmentally friendly projects if countries were serious about achieving their climate protection objectives.

He added that the project does not have enough funds.

The former French finance minister also revealed that the European Union needs to invest € 290 billion annually to meet its commitments under the Paris 2015 climate agreement.

However, only € 100 billion was given for the green initiative last year.

In addition, he claimed that no clear disclosure of the environmentally friendly investment was raised. Therefore, legislators and financial regulators need to play their role.

Accordingly, several countries are welcome to introduce 'green' bonds such as France, Germany, Belgium, the Netherlands and Lithuania. In addition, the European Parliament has put forward a proposal to identify projects that will be labeled green.

In addition, Lagarde argues that the climate policy introduced is important in the monetary policy of the European Central Bank, which is to increase the bank's prospects for using its massive stimulus scheme targeting green bonds.

For all intents and purposes, green bonds are an allocation to finance investment projects with environmental benefits, as opposed to bonds related to the carbon-intensive industry or other "brown" sectors that contribute to global warming.