At the IMF Annual Meetings last week it seems everyone agrees that encouraging investment into environmental and social projects is ‘a good thing’ – hence the rise in green bonds and the trend to impact and ESG (Environmental Social and Governance) investing.
Other similar emerging asset classes to consider are PPPs.
But building critical mass in this area is difficult. One example: there are around USD 200 billion of green bonds in existence but that is just a fraction of a USD 100 trillion global bond market.
What’s more, there are question marks over the ‘greenness’ of a number of them. There is no doubt that some sharks have been feeding in this pool.