Due to their relative newness on the scene, green bonds are still perceived as a niche option by some investors. In reality, as you read this, they are hitting the mainstream. In 2018, new issuance of green bonds hit $168 billion, skyrocketing from just $42 billion back in 2015. This year is projected to set a record for new issues, with estimates as high as $250 billion.* In short, it’s becoming increasingly clear that green bonds are here to stay. And in a context of increasing investor scrutiny of the risks of ‘greenwashing’, independent experts like the Climate Bonds Initiative can help ensure you’re getting exactly what it says on the tin.
But what of the premium – or so-called “greenium” – that investors are wary may come with doing well by doing good? Does it actually exist? It is true that many investors believe that ethical concerns come at the cost of financial performance – or, to put it more plainly, that ‘you get what you pay for’. Surely the environmental benefits ramp up the price, making green bonds more expensive than their ‘vanilla’ counterparts – or do they?
*Source for all figures: Climate Bonds Initiative, 30/08/2019.
FOR PROFESSIONAL CLIENTS ONLY. CAPITAL AT RISK.
This communication is for the exclusive use of investors acting on their own account and categorised either as “Eligible Counterparties” or “Professional Clients” within the meaning of Markets in Financial Instruments Directive 2014/65/EU. These products comply with the UCITS Directive (2009/65/EC). Société Générale and Lyxor International Asset Management (LIAM) recommend that investors read carefully the “investment risks” section of the product’s documentation (prospectus and KIID). The prospectus and KIID are available free of charge on www.lyxoretf.com, and upon request to firstname.lastname@example.org.
Except for the United-Kingdom, where this communication is issued in the UK by Lyxor Asset Management UK LLP, which is authorized and regulated by the Financial Conduct Authority in the UK under Registration Number 435658, this communication is issued by Lyxor International Asset Management (LIAM), a French management company authorized by the Autorité des marchés financiers and placed under the regulations of the UCITS (2014/91/EU) and AIFM (2011/61/EU) Directives. Société Générale is a French credit institution (bank) authorised by the Autorité de contrôle prudentiel et de résolution (the French Prudential Control Authority).