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Analysis

Positive view of green bonds' future prospects

The poll for this month focuses on the rise of green bonds in 2018. Participants were asked, 'Green bond issuance is hitting record levels this year. Is this a sign of meaningful future growth, or is it just temporary?'

Of those who responded to the advisers network poll, 73% believe the issuance levels recorded this year are not a fad. Commitment to green projects through recent United Nations directives and the 2015 Paris agreement were popular explanations for the pick up in sustainable investment. Even so, some expressed caution that full institutional support in areas such as carbon pricing is needed before high levels of growth can occur.

On the other side, 27% of advisers suggested there would be only temporary growth. Investors' need to gain the highest possible yields was given as a strong reason for why green bonds, which generally offer lower returns compared to other assets, may struggle to become more popular. OMFIF's online poll echoed the result of the advisers network, with 70% of voters predicting meaningful growth in green bond issuance.

June Poll

 

'Increased issuance is a sign of meaningful future growth. The same will be seen for social bonds.'
Olivier Rousseau, Fonds de réserve pour les retraites

'The success of green bonds will depend on their return. Even the strongest supporters will not buy investments that have low returns.'
John Kornblum, former US diplomat

'Growth will be temporary unless carbon pricing is given teeth globally to support demand.'
Irena Asmundson, California Department of Finance

'Green bonds are just an allocation of total investment in bonds. As a percentage of total bond investment I only see a gradual increase.'
Paul Newton, London & Oxford Capital Markets

'This year's increase in issuance is a sign of substantive and durable future growth.'
Hans Blommestein, Vivid Economics

'With the G20, central banks and regulators continuing to support the green sector, this is the start of a long run shift towards sustainable finance.'
Stuart Mackintosh, Group of Thirty