Right at a moment when international climate efforts were concentrated at COP21 taking place in Paris in 2015, the city issued the Paris Climate Bond (PCB)1 to finance and re-finance projects in climate mitigation and adaptation. The PCB constitutes an innovative tool to reach the goals of the city of Paris´ ambitious Climate Action Plan, which aims to make Paris a carbon-neutral and climate-resilient city by 2050. It functions in line with the ‘Green Bond Principles’, which are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the green bond market (ICMA, 2018). The bond has a size of EUR 300 million, a term from 2015 to 2031, and targets private investors who are interested in seizing this investment opportunity while funding sustainable actions in the city of Paris. Investors receive a coupon of 1.75% per year (ClimateADAPT, 2016). The Paris Climate Bond aims to fulfil four main goals: Greenhouse gas (GHG) emission reductions, improvement of energy efficiency, renewable energy production, and climate change adaptation (Climate Bonds Initiative, 2015; ClimateADAPT, 2016).

The case constitutes a good practice for a variety of reasons: The city of Paris has involved different knowledgeable stakeholders to secure a well-informed implementation of the bond. In addition, the political will to push for ambitious climate policies in Paris has been continuously strong, which helped to foster its burgeoning green bond market. Lastly, a transparent reporting structure has attracted investors as they can easily assess the impacts of their investments.