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It's Time To Invest In Green Bonds

By Matteo BernardiMarket OverviewMar 11, 2020 13:03
ca.investing.com/analysis/this-is-the-time-to-invest-in-green-bond-200434565
It's Time To Invest In Green Bonds
By Matteo Bernardi   |  Mar 11, 2020 13:03
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Everyone is always looking for a good product to invest in. We live in a society in which most investors are only interested in the return that an activity generates, not paying the slightest attention to the projects that are going to be supported by granting the financing. For some years, however, it has been possible to allocate your savings to companies and institutions that intend to use the resources granted to them to try to face the biggest problem of our time: climate change. This new way of investing allows those interested to constantly monitor the funded projects, with an eye on innovation to the future.

Green Bonds are bonds that allow you to finance environmentally sustainable projects or promoting the fight against climate change. They present themselves as a valid and healthy alternative to traditional investments, since they have similar returns and present the opportunity to invest in projects that promise to safeguard and improve the climate.

The main objectives that the issuers want to pursue concern energy efficiency, the sustainable use of drinking water and land, the prevention of pollution, the recovery of energy from clean sources and the treatment of waste.

The peculiarity of these bonds does not end with the ethically admirable purpose that they promise to pursue but are particularly interesting also from an operational point of view. The characteristic that distinguishes these obligations is absolute transparency. In fact, the investor is able to monitor the project from the time of signing to that of liquidation, receiving periodic reports on the progress of the projects.

Green Bonds are growing rapidly. Just think that this market went from $ 17 billion in 2014 to $ 440 billion in August 2019. One of the main issuers of these bonds is the World Bank, which presents a triple-A rating and, according to the data reported on its website, from 2008 to today it has issued $13 billion of green bonds through more than 150 transactions in 20 different currencies.

Recently, the European Commission praised the potential of this market, presenting a package of measures entitled "Clean energy for all Europeans," according to which from 2021 an implementation of $177 billion will be needed to achieve the climate objectives that have been set for 2030. It is understood that although this market has made significant progress, it is still in full expansion phase and that it presents interesting future investment opportunities.

We are facing a new way of investing, oriented towards the future. The time has come to know what kind of projects our savings are destined for. Environmental sustainability will receive increasing attention from institutions and businesses in the future, which are already moving to increase the issue of "green" loans.

For investors, this market presents a twofold opportunity: that of remuneration and that of taking part in an initiative that has as its ultimate objective the saving of the climate.

It's Time To Invest In Green Bonds
 

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It's Time To Invest In Green Bonds

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