While the definition of what, exactly, is a green bond may be somewhat squishy, that hasn’t stopped investors from pouring money into them. Since these debt instruments first hit the market in 2007, more than $1 trillion dollars worth of green bonds has been issued.

Green bonds are the most heavily used instruments in the sustainable debt market, according to a new report released Monday by research firm BloombergNEF. So far in 2020, more than $200 billion in green bonds have been issued. In 2019, nearly $273 billion in green bonds were issued for the entire year.

September saw more than $13 billion in new bond issues, led by Germany’s sovereign issue of $7.7 billion and two additional issues that together totaled $5 billion.

Green bonds account for around half of the more than $2 trillion in total environment, social, and governance (ESG) debt issuances. The proceeds of green bond issues are typically used to fund and develop environment-related projects. These are not the same as ESG corporate bond exchange-traded funds (ETFs) that include bonds issued by large corporations.

Despite the growth in green bonds, Marius Pratsch, head of sustainable bonds and finance at DZ Bank (Germany’s second-largest bank), the world needs to invest at least $500 billion annually for 10 years to close the climate financing gap. The United Nations has estimated a financing gap of $2 trillion to $3 trillion annually in developing countries alone. Pratsch also makes the obvious point: “The road towards a sustainable economy is unthinkable with the participation of the capital markets. Public money will not be enough.” That’s where green bonds come in.

Green bond investing is likely to grow once the eurozone agrees on a definition of exactly what counts as “green.” A distinction between green and greenwashing is needed to ensure that when investors buy a green bond that they are getting a known, standard product. A decision is due next year, according to a report last week from Bloomberg News.

Once the framework for green bonds is set by the European Commission (EC), a flood of new bonds totaling some $264 billion is poised to hit the market in 2021. That’s about one-third of the EC’s $888 billion plan to help the EU recover from the impact of the coronavirus pandemic.

According to a report at Pensions & Investments, green sovereign bonds are trading at tiny premium to convention sovereign issues. The report cites Shawn Keegan, a senior vice-president at AllianceBernstein, who commented that “if you think about sovereigns, where they are today 1 or 2 basis points makes a big difference.” Germany’s green sovereign issue in September now trades 2 basis points above a conventional German bund.

BloombergNEF’s Maia Godemer said that the integration of ESG criteria “has never been more important for investors” than right now. She also expects further innovation in green finance, partly driven by the EC’s push to standardize the definition of green bonds.

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