# Green Bond

*ESG & Sustainable Finance — Finicade finance glossary*

A green bond ring-fences its proceeds for environmental projects, with reporting on how the money was used. It's ordinary credit risk of the issuer with an earmark attached. The pricing benefit — the greenium — is real but small, typically a few basis points, and the recurring criticism is fungibility: money is fungible, so funding a green project may simply free other funds for anything else.

**Also known as:** green bonds, use of proceeds bond, green bond principles

**Related terms:** [Sustainability-Linked Loan](https://finicade.com/glossary/sustainability-linked-loan), [Transition Finance](https://finicade.com/glossary/transition-finance), [Greenwashing](https://finicade.com/glossary/greenwashing), [Corporate Bond](https://finicade.com/glossary/corporate-bond), [Additionality](https://finicade.com/glossary/additionality)

Source: https://finicade.com/glossary/green-bond