The broader ESG (environmental, social, and governance) megatrends such as climate change, rising inequality, Cybersecurity and etc, plus the unprecedented global crisis of COVID-19 are driving the green investment movement. Green bonds, this fixed income investment designing to raise funds to support climate-related projects is blooming.
Despite the COVID-19 Pandemic, Investors flocked to sustainable-focused funds. Global fund flows hit record levels for Q2 of 2020—surpassing $71 billion. It is expected, by the end of 2020, $45 trillion in assets will adhere to sustainable practices, including ESG principles. (Visual Capitalist & JP Morgan 2020)
In terms of the top sectors for green bond issuance, alternative energy, accounting for over $143 billion in green bonds, outpaces all other sectors. Meanwhile, green building bonds are garnering attention. Interestingly, Big Tech is also becoming more active within the green bond landscape. Google’s parent company, Alphabet, has issued a record $5.8 billion in corporate sustainability bonds to fund everything from energy efficiency projects to affordable housing.
These trends show that sustainability is no longer an isolated investment theme, but a phenomenon with many faces, and its habitat is not limited to a handful of industries and sectors, or even a specific region.