Rising demand for climate protection bonds
Three successful years for Raiffeisen-GreenBonds
The following assessments focus on the current market situation and can change at any time without prior notice. They do not constitute a forecast for the future development of the financial markets or the Raiffeisen-GreenBonds.
Green bonds for financing climate and environmental protection projects continue to grow strongly. Even China, one of the main environmental polluters in recent decades, has set the goal “Make our sky blue again”. Compared to traditional bonds, green bonds offer an additional advantage above and beyond the coupon: Co-financing a liveable environment is a kind of “extra dividend” for investors and for the planet as a whole.
Raiffeisen-GreenBonds also pays attention to the sustainability of the issuers, which is not (yet) always the case with green bonds.
- Investments in Raiffeisen-GreenBonds can make a contribution to climate protection
- Particularly strict sustainability criteria, excellent issuer quality (current average rating: AA (S&P))
- Internationally recognised SRI expertise with many years of proven bond competence
- Yet another top rating of three stars with the FNG Sustainability Seal1
- Any FX risks are hedged
Targeted climate protection investment
Green bonds are bonds that finance environmental and social projects, such as renewable energy, water treatment, more energy-efficient buildings, and similar measures. More and more of these bonds are now being issued by companies and commercial banks, and not just by public institutions. The Green Bond Principles defined by the major investment houses in 2014 are intended to ensure investors that green bonds are really used for climate and environmental protection.
So far, green bonds have not really differed from the traditional bonds of the same issuers in terms of the interest rate, performance, and valuation. Thus, investors can make a contribution to climate protection and sustainable business without suffering any disadvantage in returns. In some countries, such as France for example, legislators are aiming to have pension funds primarily make sustainable capital investments, possibly with an eye to only allowing this type of investment someday. At the same time, it should be noted that investments in green bonds also involve risks, such as downgrade risk and default risk, for example.
Sustainable investment – a core competence of Raiffeisen Capital Management
This kind of recognition is the result of the long-standing, intensive, and systematic development of SRI competence at Raiffeisen KAG. The SRI team is headed by Wolfgang Pinner, one of Austria’s foremost experts in the field. Raiffeisen KAG is also a signatory to the Principles for Responsible Investment of the United Nations (PRI). Raiffeisen-GreenBonds combines this competence in sustainability with our decades of proven expertise in the successful management of bond products. A transparent, multi-stage investment process ensures that the best possible selection is made from the available green bonds in terms of sustainability aspects and also in terms of bond quality. The fund’s investments are generally in the investment grade segment, with sub-investment grade bonds limited to no more than 10% of the portfolio. Additional active bond strategies can also be used for risk-return optimisation. Any FX risks are hedged.
More about Raiffeisen-GreenBonds
1FNG stands for Forum Nachhaltige Geldanlagen (Socially Responsible Investment Forum), a professional association for sustainable financial investments in Germany, Austria, Liechtenstein, and Switzerland.
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