Originally published in The Bond Buyer
By Julien Bras
The disruption caused by the COVID-19 pandemic has affected virtually every corner of the financial markets around the world. But one particular segment — the market for green bonds, or debt earmarked for specific environmental projects — has held up better than the broader investment-grade corporate market, in large part because it is less weighted toward cyclical sectors, such as oil and gas.
But there’s another important corollary of the pandemic bolstering the green bond market: a heightened level of investors’ attention and sensitivity toward social and environmental issues. A sensitivity that could represent the beginning of a long-lasting trend that may positively impact the market for green bond investing for years to come.
Underscoring this sentiment, demand for this nascent bond asset class has been robust during the pandemic. As of the end of April, more than $50 billion of green bonds have been issued, including $16.2 billion sold in April, the strongest month of the year, according to the Climate Bond Initiative.
Beyond their usefulness as a defensive bet during uncertain times, the global pandemic could now be a catalyst to convince the wider community of investors that it’s good business to use green bonds to address our ongoing climate change challenges.
Read the full article in The Bond Buyer