The Shape of Green Fixed Income Investing to Come

The Journal of Environmental Investing Vol.10 no.1 (2020), 5-29

19 Pages Posted: 27 Aug 2020 Last revised: 28 Sep 2020

See all articles by Kim Schumacher

Kim Schumacher

Tokyo Institute of Technology - School of Environment and Society; University of Oxford - School of Geography and the Environment

Date Written: July 25, 2020

Abstract

This paper serves as an introduction to the Journal of Environmental Investing’s issue (Vol. 10, No. 1, 2020) on climate and green bonds. Fixed income securities that integrate environmental, social, and governance (ESG) factors have become a crucial component of most sustainable investment and climate-related risk management strategies. Global green bond issuance has grown from USD87.2bn in 2016 to USD257.7bn in 2019. However, this issue is addressing some of the challenges of rapid market scaling. The first pertains to the labeling of green bonds. Albeit the term “green bond” becoming synonymous for all ESG-aligned fixed income securities, there now exists a plethora of labels, names, and designations for green bonds, often resulting in confusion of what exactly constitutes a green bond. By providing the most comprehensive overview to date of all green bond variants, this issue explores the core attributes of green bonds, such as their potential returns from financial and non-financial angles, taxonomical and underlying conceptual considerations, and academic assessment of the market as a whole. In conclusion, this paper and the corresponding issue provide contemporary insights and an up-to-date snapshot of the evolving characteristics of climate and green bonds.

Keywords: Sustainable Finance, ESG, Green Bonds, Climate Bonds, Taxonomy, Sustainability, SDGs, Responsible investment, Fixed Income

JEL Classification: G3, O16, Q01, Q2, Q3, Q4, Q54, Q56

Suggested Citation

Schumacher, Kim, The Shape of Green Fixed Income Investing to Come (July 25, 2020). The Journal of Environmental Investing Vol.10 no.1 (2020), 5-29, Available at SSRN: https://ssrn.com/abstract=3663308 or http://dx.doi.org/10.2139/ssrn.3663308

Kim Schumacher (Contact Author)

Tokyo Institute of Technology - School of Environment and Society ( email )

2-12-1 Ookayama, Meguro-ku
Tokyo, Tokyo-to 152-8550
Japan

HOME PAGE: http://bit.ly/2Dj8Y8S

University of Oxford - School of Geography and the Environment ( email )

Oxford University Centre for the Environment
South Parks Road
Oxford, OX1 3QY
United Kingdom

HOME PAGE: http://www.geog.ox.ac.uk/staff/kschumacher.html

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