The implementation of green bonds in Berlin and their impact on sustainable urban projects

Cities worldwide are confronted with the challenges posed by climate change, prompting the search for innovative solutions such as Nature-Based Solutions (NBS). However, financing these initiatives has become a significant concern. Public resources are insufficient, necessitating a global effort to invest in order to meet the Paris Agreement targets. Among the sustainable financing methods to bridge this financing gap, green bonds have emerged as a strategic tool. Despite their potential, there is limited research on the implementation and utilization of green bonds.

This thesis explores the deployment of green bonds within the framework of sustainable urban finance, focusing on the Berlin Sustainable Bond Framework. Utilizing content analysis of policy documents and expert interviews, the research investigates both the effectiveness and challenges associated with the use of green bonds in promoting urban sustainability. The findings reveal that while Berlin’s framework facilitates the funding of sustainable projects, it predominantly serves to refinance existing expenditures rather than fostering new initiatives. Additionally, the study highlights the ambiguity in the ESG standards applied, underscoring the risk of greenwashing. The thesis argues for the necessity of developing more rigorous, standardized assessment tools to enhance the transparency and efficacy of sustainable finance. Further research is urged to establish frameworks that not only refinance but also significantly increase funding for innovative green projects, thereby contributing more effectively to urban sustainability goals.