Green Bonds and the Dentist’s Advice

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    Before digging into this week’s green bond frenzy, we caught up with Oshni Arachchi who just joined Folksam as an ESG Corporate Analyst. She told us a story worth sharing, about how a dentist appointment opened her eyes and became a decisive turning point in her career.

    In ETF land, the UBS ETF S&P 500 ESG UCITS ETF reached the US$1 billion AUM mark, which makes it the largest ETF tracking the ESG version of the renowned US large-cap index. A little earlier in the summer, Franklin Templeton added two climate-focused funds tracking the Paris-aligned versions of the Stoxx Europe 600 and the S&P 500 indices to its Franklin LibertyShare smart-beta ETF range. In an interview with Caroline Baron, Head of ETF Sales for  Europe, the Middle East and Africa at Franklin Templeton, we found out about the story behind these funds, their target audience and appeal.

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    In the world of Swedish green bonds, real estate companies are some of the leading corporate issuers. Bonava a Swedish residential developer of sustainable and affordable housing – is just the latest such company to join this market with an inaugural SEK1 billion four-year issue. A little earlier, Arwidsro Fastighets AB issued SEK400 million in three-year senior unsecured floating rate green bonds. According to the borrower, the transaction was “significantly oversubscribed by more than twice the issued volume”.

    Elsewhere, as European green investors finalise their preparations to incorporate the new definitions imposed by the EU taxonomy into their investment process, the European Investment Bank has taken the lead in providing investment opportunities aligned with the new framework, with a SEK1.6 billion ten-year green bond issue.

    CICERO Shades of Green, the Norwegian-based second opinion provider for green bond frameworks, joined forces with Pareto Asset Management to assess the Swedish green bond market’s reaction to the COVID-19-led market crisis in March 2020 and draw lessons for the future. The report underlines the existence of a small greenium and highlights several advantages for both issuers and investors, not the least in times of crisis.

    In another report, written jointly by the London School of Hygiene and Tropical Medicine and researchers from Swedish-based alternative manager IPM Informed Portfolio Management looks at the impact of non-pharmaceutical interventions (NPIs) on SARS-CoV-2 in community transmission across countries and territories.


    Picture by @chibelek via Twenty20

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.
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