Not all ESG bonds are what they purport to be. Here's how to help identify the reputable ones

Conversely, it's possible to find bonds that are unlabeled by the issuer but actually do have positive environmental or social benefits

One way to avoid so-called greenwashing is to determine whether an issuer has labeled its bond in accordance with internationally recognized standards

The International Capital Market Association recommends issuers follow a set of principles that promote greater transparency, disclosure, and reporting

The Climate Bonds Initiative certifies bonds that meet the International Capital Market Association's Green Bond Principles

To receive the "Climate Bonds Standard Certified" label, an issuer must submit to an external review by an approved verifier and include the resulting report in its offering documents

If the work required to identify reputable ESG-oriented bonds feels daunting, you might instead consider a bond fund, an exchange-traded fund

The management teams behind these investment vehicles often implement robust, proprietary screening methodologies