Green bonds are used to support environmental projects. This is also worthwhile for investors. But the eco-funds have some pitfalls.
FIn the past, people liked to chat about the weather, but today everyone talks only about the climate: the schoolchildren on the street, the managers and politicians at the Davos World Economic Forum, the EU Commission and the European Central Bank, whose new President Christine Lagarde is about one thinking about green monetary policy. Last Wednesday, the Bank for International Settlements, i.e. the central bank of the central banks, also announced: “Climate change could be the cause of the next systemic financial crisis.” For investors too, sustainability has long been more than just a zeitgeist issue. After all, word gradually gets around that an investment that follows ecological and social criteria not only calms one’s conscience and leaves the children with a more livable world, but that it can also generate a decent return.
More and more funds are going green
Nowadays, under the more or less gentle pressure of investors, a company can hardly afford to ignore the topic of sustainability and not at least paint itself green. The environment, social affairs and good corporate governance, which are summarized under the acronym ESG, are now among the criteria of many equity investors. But the bond market is also becoming more and more environmentally conscious. So-called green bonds, known in financial jargon as green bonds, are increasingly in demand. While the issue volume in 2013 was just 11.5 billion dollars, it was 248 billion dollars last year, according to the Climate Bond Initiative. That’s only about four percent of the global bond market, but the volume is growing steadily. The organization expects to reach $ 400 billion this year. The United States and China were again the countries with the highest issuance volumes in 2019; however, by no means all green bonds from China meet the global standards.