Green bonds issuance near triples in Q1

green-bonds/calvert/ESG/bonds/

28 April 2021
| By Oksana Patron |
image
image
expand image

Issuance of green bonds almost tripled to $111 billion in the first quarter, compared to the same period a year ago, as investors seek alignment with climate-risk and environmental solutions, according to Calvert Research and Management.

Calvert’s fixed income portfolio manager, Brian S. Ellis, and ESG research associate, Henry Mason, said the pandemic heightened the awareness of environmental, social and governance (ESG) factors as drivers of social responsibility and impact as well as financial performance, turning 2020 into a pivotal year for responsible investing, especially in fixed income.

“Curbing climate change is the top reason that national governments issue green, social and sustainability (GSS) bonds, according to the Climate Bonds Initiative (CBI). Those sovereign issuers have also served as catalysts for corporate and institutional issuers, according to green bond analysts.

“From public pension plans to banks to endowment funds, we are seeing ever-greater institutional interest and mandates for sustainable and green investment,” Ellis said.

“The asset growth in green bonds is a factor in their attraction. With overall green issuance now approaching the size of high-yield offerings, green bonds are recently offering greater liquidity and diversification opportunities — a major concern for institutional investors.”

At the same time, institutional investors were looking for deep, proprietary worked behind green bond offerings as well as measurement and reporting of impact metrics, in particularly consultants and banks who had dedicated sustainability teams to help evaluate the ESG profiles of issuers and securities.

Calvert said that as green bonds were newer to the industry, and developing metrics is a younger work in progress.

“We continue to be selective in independently evaluating the structure of green bonds and the overall issuer profile across sectors, industries and countries to identify the most attractive securities for our portfolios,” Ellis noted.

“Importantly, across our green bond strategies, we seek issuers with strategic environmental goals that are aligned with the green debt they are issuing.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 4 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

3 weeks 5 days ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 4 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 3 days ago

TOP PERFORMING FUNDS