“The risk in question is the failure of countries to adequately protect their natural capital, putting water, air and soil resources in jeopardy and impacting key sectors such as agriculture, a team of analysts led by Maggie O’Neal, Barclays’ global head of ESG research, wrote in the report published on Monday.”
[COMMENTARY] The loss of natural capital potentially jeopardizes both corporate and sovereign bond returns. For instance, climate change and resultant fires, floods, droughts, etc., can mean reduced returns on all affected investments. Rarely do bond issuers, investors, and rating agencies account for the possibility of such losses! This is where some green bonds might have an advantage.
Barclays Warns of Bond Risk Few Creditors Are Pricing Right, by Frances Schwartzkopff, September 4, 2023, Yahoo! Finance, USA.