U.S. cities and states are experiencing severe and increasing financial impacts as a result of climate change and extreme weather events. From 2010-2019, the U.S. experienced 131 climate-related disasters that generated losses of more than $1 billion each; this is a stark comparison to 33 such incidents in the 1980s.1
To both mitigate and respond to future events, U.S. municipalities are exploring ways to fortify infrastructure and provide energy-efficient affordable housing. Sustainability bonds, which fund projects with both environmental and social benefits, are one key way that cities and states are raising capital for these efforts. Here’s what institutional and retail investors should know about the market for sustainability bonds and some of the ways they are making a difference.