ESG products

Currently, a growing number of investors are looking for ways to combine profit with a positive impact on society and the environment. Issuers are therefore increasingly using the opportunity to issue investment instruments that are linked to the fulfilment of certain ESG criteria. And these investment instruments can be admitted to one of the Prague Stock Exchange's markets. These are most often bonds or debt securities.

Bonds linked to ESG criteria (also known as sustainable bonds) operate on the same principle as conventional bonds, where the issuer raises capital from investors with the obligation of regular returns and repayment of principal. The difference is that the funds obtained from the issue must be used exclusively for a defined range of projects, for example, climate protection, sustainable management of natural resources, support for social initiatives, activities contributing to sustainable development, etc.

There are several types of sustainable bonds on the market. These include green bonds, which are designed to finance projects with a positive environmental impact (e.g. investments in renewable energy, energy efficiency, green infrastructure, etc.), social bonds, which are designed to support projects in areas such as affordable housing, healthcare or education, and sustainability-linked bonds, which link investment returns to the fulfilment of specific ESG objectives (environmental, social and governance).

Sustainable bonds or other securities linked to the fulfilment of ESG criteria may be issued according to different international, regional or national standards. The Prague Stock Exchange has not yet developed its own standard for the issuance of sustainable bonds or specific conditions for their admission to trading. However, green bonds issued in accordance with the International Capital Market Association (ICMA) standards or the EU's European Green Bond Standard framework are most often ESG products admitted to trading on the Prague Stock Exchange market.

For more information about the ESG products and their trading, please contact us.

Below you will find an overview of investment instruments linked to some of the ESG criteria that are admitted to trading on the Prague Stock Exchange markets.