Responsible Investment charity ShareAction and the Climate Bonds Initiative have produced an investor briefing on green bonds to coincide with an explosion in the market for the products.
The green bond market more than tripled in 2014 with £24bn invested, compared to just £7bn in 2013, and the briefing is part of ShareAction’s Green Light campaign, which aims to encourage pension providers to embed climate awareness into their investment decisions.
The briefing rounds up the key features of green bonds, recent developments in the green bonds market, benefits to investors, and a list of questions pension funds might wish to ask their fund managers and investment consultants regarding green bond opportunities.
Green bonds have been used so far to fund a variety of projects including renewable energy, energy efficiency, low carbon buildings and transport, water, waste management and climate adaptation projects.
A number of major investors including Aviva Investors, Natixis Asset Managers and Zurich Re-insurance have signed an Investor Statement prepared by the Climate Bonds Initiative acknowledging the significant risk posed by climate change and welcoming the growth of green bonds as a mechanism to finance climate solutions.
ShareAction Chief Executive Catherine Howarth says:
“The names Daniel Craig, Sean Connery and Roger Moore often come to mind when people ask ‘which Bond is best?’ But our investor briefing on green bonds throws another, far more interesting type of bond into the mix for pension investors, and of course, unlike everyone’s favourite fictional secret agent, green bonds offer comparatively low risk and a secure path to a low-carbon future. So far they’re a better-kept secret than Ian Fleming’s 007.”
“Investors managing £30trn have publicly declared climate and responsible investment commitments as part of the Institutional Investors Group on Climate Change, and green bonds can help meet those investors’ objectives.”
Link to a pdf of the report below
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