According to NN Investment Partners (NN IP), the green, social and sustainable bond market will reach €1.1 trillion in issuances in 2022. The reasons for the figure include investors seeking to fund the energy transition, and corporates and sovereign wealth funds searching for fossil fuel alternatives along with other low-carbon transport investment opportunities.
Another motivating factor is that some sectors have fallen behind and therefore have increased room to catch-up in green bond issuance. Other factors spurring growth in the green bond issuance market are recently introduced regulations like the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy.
Douglas Farquhar, client portfolio manager, green bonds at NN IP: “Since mid-2021 the green bond market has grown exponentially as it has gained support of investors to allocate in solutions that can create a positive environmental impact. Short duration and corporate green bond funds remain popular due to the potential to obtain high yield, performance and a positive environmental impact. The rapid growth in our green bonds strategies underlines that green bonds are being recognized for the pivotal role they play in the energy transition, contributing to meeting net zero goals and addressing climate change.”
NN IP has also added a new member to its green bonds team in appointing Roel van Broekhuizen as a portfolio manager for green bond strategy.