This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
| less than a minute read

Shades of Green: The Rise of Green Bonds and Sustainable Investments

In the wake of the Covid-19 pandemic, governments and businesses will focus their attention on rebuilding, including a move to more environmentally sustainable economies. As a result, issuers of all types are using green bonds to finance projects related to environmental initiatives.

On a steady upward trajectory over the past few years, green bonds are a growing category of fixed-income securities that raise capital for projects with environmental benefits, such as renewable energy or low-carbon transport. Although they make up only a small fraction of the total global bond market—about 4 percent—green bonds reached a record high of nearly US$270 billion by the end of 2020. New issuance could reach US$400-$450 billion this year, according to a report by the London-based non-profit Climate Bonds Initiative, which promotes investment in the low-carbon economy. Due to strong demand relative to the wider bond market, green bonds have shown comparatively strong resilience during pandemic-related market volatility.

“The green bond market is growing very quickly,” says Angus Young, senior lecturer and research fellow at Hong Kong Baptist University’s Department of Accountancy and Law, and Centre for Corporate Governance and Financial Policy. He adds that by not including green bonds in a fixed-income portfolio allocation, investors could be missing an opportunity for asset diversification.

Tags

greenbond, sustainability, greenfinance, hong kong

Creating, sharing and inspiring change. For good.

The global issues we face are challenging and interconnected. They can seem insurmountable. But if you know where to look, co-operation, positive change and hope are all around us. Build Beyond Even Better is a project that recognises the progress being made, and the amazing people who are making a difference. Share your own hopes, pledges and projects with #BBEB, or become a contributor.

Please read our BBEB Charter PDF.