NN Investment Partners (NN IP) expects the green, social and sustainability (GSS) bond market to reach a total of €1.1 trillion worth of issuances this year.
The asset manager cited investor urgency to finance the energy transition as sovereigns and corporates look for fossil fuel alternatives and other low-carbon transport opportunities.
NN IP said another reason for the market growth due to increasing issuances is that some segments, such as sterling investors, have lagged, indicating there is “more room for growth”.
US dollar-denominated issuances increased in the last quarter of 2021, allowing issuers in the US and globally to allocate to green bonds. NN IP expects that with more issuers entering the green bonds market it will continue to grow.
The Netherlands-based asset manager said recently-introduced regulations, such as the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy, have also spurred the market’s growth.
Douglas Farquhar, client portfolio manager, green bonds at NN IP, said: “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 also announced that it has expanded its green bonds team with the appointment of Roel van Broekhuizen as a portfolio manager for its green bonds strategies.
Van Broekhuizen, who joined the team at the start of March, will support NN IP’s green bond portfolios, as well as assisting in monitoring new market developments in the GSS market.
© 2022 funds europe
