Market Commentary

Bond investors and sustainability: is it all greenwash?

Posted by Anton Murray Consulting on . Posted in Market Commentary

Schroders

“We are in a boom era for borrowing linked to sustainability criteria,” according to Saida Eggerstedt, Schroders’ Head of Sustainable Credit. In 2020, the global issuance of green bonds alone totalled $226 billion as governments and companies sought finance for planet-friendly initiatives, Bloomberg has revealed. That’s compared to about $40 billion at the end of 2015. Global issuance of green, social and sustainability bonds will hit a record $650 billion in 2021, a 32% increase over last year, according to Moody’s Investor Service.

But while green bonds are clearly in fashion, there is less agreement about their definitions and the standards underpinning them. “The recovery from the global pandemic has been fuelling this expansion, as governments across the world are looking to stimulate economies and create jobs while committing to ambitious environmental targets,” Saida said. “This is being met eagerly by institutional investors wanting to meet their own ESG objectives and seeking returns in an unrewarding global fixed income market.”

The rest of this article can be found at schroders.com.

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