Sustainable Communities: The Power of Green Bonds
When creating impact with your investments, stocks tend to get a lot of the attention. However, over the last seven years, ‘green’ bond issuance has expanded significantly to create targeted positive social impact. With a stock (part ownership of a business), you are limited in how those investments will be used. With a bond (loaning to a business) you may direct your investment to support a specific event, project, or location.
Our goal with this report is to provide real life examples of how bonds can provide impact within our local communities.
It is no shock that living in the Bay Area is expensive and unaffordable to many. The housing affordability gap endangers the cultural and economic diversity of our communities.
As a community, we have also experienced energy disruption due to a more protracted fire season. Solar can help alleviate this issue while providing a renewable energy source that creates more independence, as well as reducing expenses in the long term.
Targeted bonds provide a way in which you can direct your investments to assist communities as they struggle with these widely felt challenges. We have provided examples of green bonds that our fund partners use to help finance solutions.
From the Director of Impact Investing
In this moment of change, investors are being stretched, learning and adjusting just as companies and governments. While we believe markets are capable of long term recovery, underserved communities and individuals are likely to be the hardest hit. Therefore, investments that provide needed capital to low- and moderate-income communities and families are more important than ever. Green bonds offer investors a role to play in economic wellness, both to stabilize and to stimulate our personal well-being, and for the communities in which we live.
Sarah Green, CFP®
Director, Impact Investing
What is a Green Bond?
A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects. The first one was issued in 2009 by the World Bank. Bonds are often certified by a third party. Eligible projects include:
- Renewable energy
- Energy efficiency
- Sustainable water and wastewater management
- Climate change adaptation
- Environmentally sustainable management of living natural resources and land use
- Pollution prevention and control
- Green buildings
Global sustainable debt
annual issuance, 2012 -2018
annual issuance, 2012 -2018
City and County of San Francisco
San Francisco, CA | Sustainable Housing
Homeownership opportunities are out of reach for the vast majority of San Francisco households, including low-, moderate-, and middle-income residents. Only households earning well above 175% of area median income can afford the average purchase price of a home in San Francisco. These high regional housing costs force individuals and families to leave the city and take on longer employment commutes.
The housing affordability gap throughout the city makes it a challenge to ensure that economic diversity is maintained. In an effort to relieve some of this pressure, the City and County of San Francisco Taxable Bond proceeds are being used to finance projects and programs providing affordable housing to low-, moderate-, and middle-income households. The majority (75%) of the proceeds will help individuals with incomes at or below 80% of area median income.
The housing programs will serve vulnerable San Francisco residents with priority to populations that include low-income working families, veterans, homeless individuals and families, seniors, disabled individuals, and transitional aged municipal youth. Some of the projects also include neighborhood artist workspace, childcare space, and resident common areas. In addition, the new housing is within transit oriented locations so that low- and moderate income households’ combined housing/transit expenses can be minimized.
More specifically, proceeds will be used to:
- Finance the construction, development, acquisition, and preservation of housing affordable to low-, moderate-, and middle income households through programs that will prioritize vulnerable populations such as San Francisco’s working families, veterans, seniors, and disabled persons
- Assist in the acquisition, rehabilitation, and preservation of affordable rental apartment buildings to prevent the eviction of long-term residents
- Repair and reconstruct dilapidated public housing
- Fund a middle-income rental program
- Provide homeownership down payment assistance opportunities for educators and middle-income households
Mosaic Solar Loans
Multi-State | Energy Sustainability
Headquartered in Oakland, California, Mosaic was founded in 2010. Mosaic makes financing solar energy systems accessible and affordable for homeowners by providing the simplest borrower experience in the industry. Mosaic has originated over $1.3B of loans to date. Customers are connected to top solar installers and can qualify instantly for no money down loans with fixed interest rates and multiple term options. For solar installers, Mosaic provides a streamlined financing platform to drive sales growth. Since 2012, Mosaic has helped over ten thousand people go solar with a network of over 150 installers.
Solar loans represent a growing asset class that is gaining market share as consumers shift away from solar leases and increasingly choose to benefit from ownership of residential solar systems.
Mosaic received a “Green Bond” designation based on the standards published by the International Capital Markets Association.
- Headquartered in Oakland
- Originates solar loans
- Enables approved installers to offer means of financing
- Overseas the project from start to finish
- Qualified Green bond
Interested in learning how to create impact with your investments?
If you are looking for guidance around socially responsible investing or would like us to review your current portfolio, please reach out to us for a free consultation.
Call (510) 528-5820 or email firstname.lastname@example.org
This commentary on this website reflects the personal opinions, viewpoints, and analyses of the North Berkeley Wealth Management (“North Berkeley”) employees providing such comments, and should not be regarded as a description of advisory services provided by North Berkeley or performance returns of any North Berkeley client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. North Berkeley manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.