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29 This report presents important considerations for agencies debating whether they should issue a green bond. As financial markets around the world continue to realign to reflect investor demands, green bonds are an effective means for capturing the value of initiatives that have posi- tive environmental impacts and have traditionally not been rewarded by the market. However, it is important to recognize that green bonds, or even the wider universe of use of proceeds bonds, are not a âmagic bulletâ or a âone-size-fits-allâ solution. As the use of proceeds market evolves, transit agencies will have an opportunity to continue to track and explore ways they can parlay the inherent positive impacts of their projects into a financial advantage. Transit agencies should also be cognizant of the potential risks associated with greenwashing, which can include damage to transit agenciesâ credibility and negative impacts to their ability to effectively issue green bonds. The appendix at the end of this report provides links to valuable resources that transit agencies can utilize to expand their understanding of sustainable finance and make informed decisions on how best to incorporate the available resources into their strategies going forward. This report is not intended to be the âlast wordâ on transit green bonds. This is a young and dynamic market; as it evolves and matures, further research would build confidence in transit agencies, and potentially increase the number of transit green bonds issued. Ideas for future research include: ⢠Exploration of the challengesâand potential solutions to those challengesâthat face smaller transit agencies interested in green bond issuance. ⢠Comparison of green bond issuances by transit agencies outside the US to mine best practices. ⢠Investigation of how the use of proceeds model can be leveraged to direct funds toward other issues, such as social equity. ⢠Quantitative comparison of the advantages to taxable versus tax-exempt green bond issuances for transit agencies. ⢠Cost-benefit analysis of rigorous post-issuance reporting to determine whether agencies that report rigorously enjoy advantages on future issuances. C H A P T E R 8 Conclusion