We are wrapping up another undeniably successful year for sustainable fixed income. In 2020, we marvelled at the record-breaking issuance of labelled sustainable bonds reaching close to US$550 billion. Yet already by the third quarter of 2021, this amount was exceeded. Green bonds still account for more than half of that issuance, and social bonds are quickly catching up, spurred by the pandemic. Meanwhile, the rookie ‘Sustainability-linked bond’ label has grown by a whopping 500% in just a year.
Labels, however, are not the whole story, as many of the experts interviewed in this magazine keep reminding us. Naïve assumptions based on the attractive gift-wrapping of a bond simply won’t do. Prudent fixed income managers want to look inside the package. They demand evidence of real impact, net-zero alignment, high quality, transparency, and ambitious, science-based targets. Label, or no shiny label.
Talking to the experts, it also seems like fixed income investors are growing more confident of their ability to nudge issuers in the right sustainability direction. Engagement and stewardship are no longer the exclusive domain of equity owners. Bond investors are way past being passive buyers of ready-made packages. They want in on the game, encouraging issuance and origination and helping banks to structure and wrap the debt instruments in a sustainable way.
Dig into the annual issue of our magazine, the fourth edition already, to find out more about the increasingly diverse universe of sustainable fixed income and speculate about the next big trend to pop out of this exciting box.
Tired of flipping the book? Access individual articles or download the pdf here!
1. the editor’s word: Sustainable Beyond Labels
2. Sustainability in Fixed Income, by Pilar Gomez-Bravo and Mahesh Jayakumar, MFS Investments
3. Themes for 2021 & 2022 by Ulf Erlandsson and Nona Alexander, the Anthropocene Fixed Income Institute
4. Aligning Fixed Income Portfolios to Net Zero by Manan Mehta, Northern Trust Asset Management
5. Social Bonds Beyond Labels, an interview with Simon Bonds, Columbia Threadneedle Investments
6. Looking Behind the Label, an interview with Annemieke Coldeweijer, NN Investment Partners
7. Securing Quality in a Time of Rapid Market Growth, an interview of Christian Ragnartz by David Ljung, Kommuninvest
8. Another Record Year for Sustainable Bonds, the dealers view with Katya Nolvall, Swedbank, Lars Mac Key, Nina Ahlstrand and Anna Reuterskiöld, DNB Markets
9. The Nordic Perspective, with Karin Göransson, Handelsbanken Asset Management, Matthias Ekström, SEB Investment Management and Stefan Eriksson, Pareto Asset Management
10. ATP’s Green Bond Push, an interview with Christian Kjaer, ATP
11. Do ESG Information Providers Meet the Needs of Fixed Income Investors?, a summary of an event from the UN PRI
Tired of flipping the book? Access individual articles or download the pdf here!
