Andrew Hauser, ED at Bank of England in this speech:
after many years of rhetoric from market practitioners, the temperature has changed noticeably. Hot air is turning into cold hard fact:
– Climate oriented equity indices have outperformed the broader market by 2-5% in 2020, as
economic activity has shifted away from travel and other fossil fuel-intensive sectors, and towards
online commerce and technology (Chart 1);
– Green bonds also outperformed their conventional counterparts over that same period (Chart 2), and
made up a fifth of total European investment grade issuance in September alone. And companies
such as VW and Daimler secured material reductions in financing costs (or ‘greeniums’) when
issuing their first green bonds, linked to the development of low-emission technologies;
– Governments have been increasingly persuaded of the powerful direct and indirect effects of issuing
their own ‘sovereign green bonds’ too, with a raft of countries coming to market for the first time this
year: Germany’s innovative dual-bond issuance was five times oversubscribed and commanded a
clear greenium; and the European Commission announced that it will fund 30% of its €750bn ‘Next
Generation’ budget in the same way;1
– More and more investment money is massing on the sidelines. Funds with above-average
sustainability ratings have seen big inflows this year, and now hold $4.6 trillion in assets globally. In
response, fund managers are overhauling their investment strategies to put sustainability centre
stage.To take just one example, more than 500 global investors, accounting for over $47 trillion of
assets, have committed to support the Climate Action 100+ initiative, aimed at ensuring the world’s
largest corporate greenhouse gas emitters take action on climate change.
Interesting…
Mostly Economics 
