Interest in environmental, social and governance (ESG) investing has grown rapidly in recent years as investors increasingly look for ways to mitigate ESG-related risk or effect meaningful change. Fixed income is no exception to this trend, as bonds marketed under a number of ESG labels have proven popular with investors.
These include social bonds, whose proceeds are used to finance or refinance projects that provide clear social benefits; sustainability-linked bonds, which have financial or structural characteristics that can vary depending on whether the issuer achieves predefined sustainability or ESG objectives; and green bonds, which back projects with clear environmental benefits. Corporate green bonds now make up about 1.8% of the Bloomberg Barclays Global Aggregate Corporate Bond Index, up from less than 0.4% five years ago, driven by rising issuance, growing institutional demand and increasing s...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes