Environmental issues and environmental problems are becoming more and more relevant.. In civilized countries, it is important for investors not only that, what the company is in terms of profitability, but also environmental issues, social and corporate governance.
ESG (Environmental, Social, and Corporate Governance) Are the methods of company management, as a result of which, along with effective business conduct, environmental, social and management problems. In Russia, the synonym for this term is the so-called "sustainable development" and on the websites of large public companies
There are sections of the same name in Russia.
Why do investors need it? It would seem that, we buy shares for capital growth and dividends. We analyze financial statements, multipliers, investment projects, charts stock prices, etc.. And here in general ESG?
If the quality of corporate governance and management can still be associated with the effectiveness of the company, how the environmental and social orientation of a business affects its investment attractiveness?
ESG helps build a portfolio, reflecting investor values. Such investments are important in the sense, which allows a private investor to influence the market and the economy by supporting companies with a mission close to him. This process was called "conscious capitalism".
If the company pays attention to more than just profit, but also environmental and social factors, then this speaks of his responsible approach to business. These companies are more attractive to consumers., which positively affects their reputation.
One of ESG's instruments is green bonds. Green bonds are debt securities, which are produced, to raise funds for the implementation of environmental projects, for example, in the field of energy, Transport, waste disposal, building construction, water supply. The costs of these projects must be indicated in the bond issue documentation.
The main reason for issuing bonds of this type is the global trend of preserving the environment and reducing human influence on it..
Generally, these are the same bonds, they have no differences in parameters, and they all follow the same financial laws. The only difference is the targeted use of the funds raised from the bond issue, namely environmental projects.
Where to look and how to buy green bonds? Green bonds, like all others, buy on stock exchanges or through a broker. They can be purchased by both investment funds and banks, and private individuals. You can see the "greenness" of the bonds on the website of the Moscow Exchange in the "Market" section – "Sustainable Development Sector". At the time of publication of the post on the Moscow Exchange, 14 green bond issues. Although only a couple of years ago there were only 6. The trend for the growth of the issue of these bonds is obvious.
“Green” Mosbirge bonds”Green” Mosbirge bonds
Large investment companies and financial institutions buy green bonds, to minimize risks, ecology-related. Green bonds - a chance to insure investments against material losses due to harm to the environment. For individuals, the purchase of such bonds is both income from securities and a contribution to a green future for their children..
Do I buy green bonds? Yes, if they meet my criteria for buying bonds: maturity, profitability, quality of the issuer, etc.. There is no criterion of "greenness" among them, that's why i don't look at that, where are the funds from bonds going. I speak otherwise, especially me, certainly, not looking for green bonds, but if among all bonds on the exchange there is a profitable "green" bond, I will definitely buy.
Have you heard about green bonds and ESG in general?? Maybe, even bought such bonds? Write your opinion in the comments to the post and do not forget to like it!
And by the way, I have a cool Excel spreadsheet for calculating bond yields: to buy and sell them profitably. Learn more about it by following the link in the profile header on Instagram, or just write to the direct!
