How large is the typical green bond greenium?

The greenium averages 2–5 basis points for investment-grade sovereign and supranational green bonds. Corporate green bonds show 1–3 bps greenium. High-yield green bonds show negligible or no greenium. The greenium is larger for first-time issuers in green format and for labeled bonds with strong use-of-proceeds verification.

Is the greenium economically significant for issuers?

A 5 bps greenium on a USD 1 billion 10-year bond saves approximately USD 5 million in NPV of interest savings. For large sovereign issuers, this is material. However, the incremental reporting, verification, and legal costs of a green bond program can offset most or all savings for smaller issuers.

Green Bond Greenium Pricing

Calculate the greenium (green premium) as the yield difference between a green bond and an equivalent conventional bond from the same issuer, measuring investor demand for labeled sustainable debt.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How It Works

Calculate the greenium (green premium) as the yield difference between a green bond and an equivalent conventional bond from the same issuer, measuring investor demand for labeled sustainable debt

Each component has a specific meaning:

Same issuer — The same issuer recorded for the scenario being assessed.
Measuring investor demand — The measuring investor demand recorded for the scenario being assessed.

Note: Interpret the green bond greenium result against the thresholds and context described above.

How to Use

Enter the same issuer, measuring investor demand for the scenario you are assessing. Calculate the greenium (green premium) as the yield difference between a green bond and an equivalent conventional bond from the same issuer, measuring investor demand for labeled sustainable debt. Use the green bond greenium result to inform your calculation.

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