ESG bonds. There are a number of debt instruments that have an ESG-related label. The most common are green bonds and they've seen significant issuance around the world, but bonds with other labels are growing in prominence too. So what are these ESG bonds? Let's start with green bonds. Green bonds are instruments that fund projects that have positive environmental or climate benefits. They are issued by companies as well as by governments, both national and municipal. Examples include bonds issued to fund the building of coastal flood defenses, or those financing low carbon transport or water infrastructure. A green bond can have a form of verification from a third party organization that assures that the financing meets the criteria set out in the bond. However, there is still no global consensus on the types of capital projects that fit within the scope of green bonds. Social bonds fund projects that provide access to essential services and social programs to underserved communities. Examples include education, healthcare, or affordable housing. Blue bonds fund projects with ocean-based marine benefits. Examples are bonds issued to fund sustainable fishing projects. Transition bonds are slightly different from green bonds because they typically provide financing to polluters often with fossil fuel exposure. But the funding provided is meant to help them transition towards greener technologies. Another type of ESG-related bond is the so-called sustainability bond. They have a slightly less clear definition and purpose of funding. Their proceeds are applied to finance or refinance a combination of both green and social projects. The instruments described are all bonds that can be analyzed using standard tools and methods that consider the likelihood of the issuer's ability to service the debt. However, what is less standard is how they are defined. Although ESG related bonds have existed for more than a decade, there has been confusion about which ones actually qualify for the the green or social label. There has therefore been an effort to bring some order to the capital markets for sustainable finance and to establish a blueprint for good practice. This effort was led by the International Capital Markets Association known as ICMA. They have produced a set of principles and guidelines for the issuance of ESG-focused bonds. These guidelines and principles are voluntary, but they are a blueprint for good practice and there are four key elements. Firstly, use of proceeds. The use of proceeds of a green bond should provide clear environmental benefits, which will be assessed and where feasible quantified by the issuer. Secondly, is the process for project evaluation and selection. In line with their sustainability objectives, the issuer should determine that the proceeds of the bond issuance are eligible within green project categories. The issuer needs to manage effectively the social and environmental risks associated with the project. Thirdly is management of proceeds. The proceeds should be managed in a segregated account to ensure that they are used only for the purposes for which they were raised. And fourthly, is reporting, proper record keeping and reporting to investors. Transparency is considered an important element of a green bond issue.