As per the Climate Bonds Initiative (2018),
- Market awareness is lacking from the issuers.
- One of the largest challenges is the lack of public knowledge related to green growth.
- Interest is very less in environmental thinking compare to economic profit.
- Investors have lack of knowledge and awareness regarding the future of green bonds.
- The potential threat and is also creating the market size to be small and the growth is relatively slower.
- The market standard for green bond is lacking resulting in confusion in the local market related to the green assets types or green projects.
- The transaction cost is higher for green bond issuers. Sustainable or environmentally friendly products are expensive and cost is a major player to turn around the table.
- International challenges are always going to be presenting for bond issuers.
Even though challenges are presently related to the Korean market, a positive attitude towards the following green market is growing up among the banks, interested to take the risk and create awareness in order to increase the size of the market. Every market has its own potential threat or struggles but with a better opportunity, better growth is promised.
Source:- Climate bond