“Central banks are playing an increasingly active role in promoting the move towards a sustainable global economy. One area in which they are thus involved is in guiding attempts to mobilise funds to contribute to the large-scale public sector investment required to achieve the goals of the Paris Agreement.
A key tool in this context is foreign exchange reserves, with green bonds being an increasingly popular investment choice among reserve managers.”
[COMMENTARY] Central banks buying green bonds! This could be a major extra push for the growth of green bonds. It’s another reason for ethical and sustainable investors to consider them. However, my only caution is that the debt markets in general, are already ‘priced for perfection.’ Can they really only go higher?
BIS: Reserve Management and Sustainability: The case for Green Bonds? by Ingo Fender, Mike McMorrow, Vahe Sahakyan and Omar Zulaica, March 30, 2020, BIS Working Papers #849, Switzerland.