Green gold

17 September 2020 By Neil Unmack Follow @unmack1

Securities used to finance environmentally friendly investments are thriving, with everyone from JPMorgan to Germany charging in. Yet the $800 bln market does not necessarily mean greener issuers. As investors get better at differentiating, green bonds could become redundant.

This content is for Subscribers only

Context News

The European Union may finance up to 30% of its 750 billion euro stimulus programme through green bonds, European Commission President Ursula von der Leyen said on Sept. 16.

Issuance of green bonds in 2020 totals $168 billion, according to HSBC data as of Sept. 11, buoyed by new issuers such as Germany and JPMorgan. Some $780 billion of the securities have been issued since 2015, according to HSBC data.

Companies that issue green bonds must allocate the funds to specific projects that serve environmental purposes.

Governments, banks and companies will issue up to $350 billion of so-called green bonds in 2020, according to forecasts from the Climate Bonds Initiative.

Funds that invest mostly in green bonds have $13.5 billion of assets under management, according to Morningstar data, up from $2 billion in 2015. Bond funds that invest according to environmental, social and governance factors manage $210 billion, up from $69 billion in 2015.

Email a friend

Please complete the form below.

Required fields *