London — Green bond investors, celebrating a landmark step towards establishing market standards, are starting to worry that the next big thing in sustainable finance could undermine those efforts.

So-called transition bonds are designed to help issuers in dirty industries, such as oil production and coal mining, finance their shift to cleaner ways of doing business. The risk is that the bonds’ somewhat fuzzy criteria may allow companies to get funds for projects with few environmental benefits — exactly the sort of thing that planned EU guidelines are designed to prevent in the $600bn-plus green-bond market...

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