Corporate Green, Social and Sustainability Bonds Issued, £ bn
Source: BMO Global Asset Management, Bloomberg, as at 31 December 2020
A holistic investment approach: how green is green?
Green vs non-green relative value
Will such bonds have a meaningful positive impact to a company’s sustainability goals or could they be a tool of greenwashing?
We will continue to watch the development of the green and sustainable bond market and monitor the differing performance of ESG-friendly bonds versus their non-green counterparts. Assessing the credibility of targets, projects and management intentions is extremely important in the investment decision, rather than accepting a bond as green or sustainable solely because of its label. The combination of a professional view from the RI team combined with the credit analyst’s assessment is key to making a genuine ESG impact and assessing the long-term impact upon a company’s credit quality owing to its exposure to ESG-related issues. This enables us to add value across all portfolios, not only those dedicated to ESG-focussed investment strategies.