Sustainable bonds are increasingly used to fund specific environmental and social projects, and other sustainable activities. The growth of the sustainable bonds market has been underpinned by issuance from central and regional governments, supranational organisations and corporates.
In the past, sustainable investing in fixed income was mainly about issuers’ ESG credentials. Sustainable bonds changed that – by offering investors the ability to follow the use of bond proceeds, and monitor outcomes. But here is a challenge for investors – how do you account for bond objectives in your issue selection? Moreover, different types of sustainable bonds often have different types of objectives. While green bonds’ Key Performance Indicators (KPIs) can be quite precise and science-based, social projects tend to use a more subjective assessment criteria. So what should investors do?
Our white paper “Bonds making impact: financing a sustainable future” to explore some of the topical questions:
Risks associated with investing in sustainable bonds include: Risk of loss of Capital, Credit Risk, Interest Rate Risk, Currency Risk, Liquidity Risk, Counterparty Risk and Derivatives Risk.
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