54 Stan. J. Int'l L. 1 (2018)
Investors as Regulators: Green Bonds and the Governance Challenges of the Sustainable Finance Revolution

handle is hein.journals/stanit54 and id is 9 raw text is: 








        INVESTORS AS REGULATORS:


             GREEN BONDS AND THE

  GOVERNANCE CHALLENGES OF THE

  SUSTAINABLE FINANCE REVOLUTION


                          STEPHEN  KIM  PARK


        This Article examines the role of the global financial markets in
    promoting sustainability and the governance challenges arising from this
    phenomenon.  A  growing range of financial instruments and strategies
    catalyze the desire of investors and corporations to support environmentally
    and socially sustainable commercial activity. This Article focuses on green
    bonds, a form of debt financing whose proceeds are specifically dedicated to
    environmentally-friendly green projects, assets, and business activities.
    Having emerged in the past three years, green bonds are expected to play an
    integral role in responding to the existential threat and enormous costs posed
    by climate change. Largely missing from the still-nascent green bond market
    are government regulators. Instead, its governance is decentralized and
    primarily shaped by private governance regimes (such as investment
    standards, certification schemes, ratings, and third-party assessment), which
    compete or collaborate with each other for market adoption. In comparison
    to public regulation, private governance is often faster to implement and more
    responsive to the needs of market participants but may suffer from a lack of
    legitimacy, accountability, and consistency and be susceptible to
    greenwashing. To address these deficits, this Article identifies and analyzes
    governance gaps in the green bond market and outlines a public-private
    hybrid regulatory framework to optimize the interests of investors and
    stakeholders.

INTRODUCTION           ................................................. ....... 2
I. THE EMERGENCE  OF GREEN BONDS          ................ .................... 8
   A. Sustainable Finance and the Limitations of Investment Screening and
      Shareholder Activism     .............................  ........... 8
   B. Green Bonds in the Green Economy               ........................ 11
   C. Origins and Trends in the Green Bond Market.............  ................... 14
II. THE GOVERNANCE MARKET  FOR GREEN  BONDS.........................  17
   A. Mapping Private Governance in the Green Bond Market...        ............ 17

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54 STAN. J. INT'L L. 1 (2018)

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