Published on 28 March 2017

SUSTAINABLE FINANCE

European green bonds attract investors

According to a study published on March 28th by the Novethic Research Centre with support of ADEME, environmentally themed funds are seeing strong momentum in Europe, with growth of 47% over three years. This represents €22 billion invested across 165 different funds. The most successful of these are those that combine ambitious environmental targets with investments in companies that offer visible environmental added value.

The study of the Novethic research center, published on March 28 with the support of the Ademe, provides an overview of 165 funds distributed in 16 European countries.
Novethic

For the third time in less than 10 years, the Novethic Research Centre has conducted an examination of the European environmental fund market. Its study, published on 28 March 2017 with the support of ADEME, provides an overview of 165 funds distributed across 16 European countries. 

“Dark green” funds have proven particularly attractive, their assets under management growing 64% in three years. These are funds that align their portfolios with clear environmental objectives. Water investment funds have been the most successful, accounting for 40% of the €22 billion invested in “green” financial products.

 

Innovative mechanisms 

 

The study highlights four leading countries where environmental investment is particularly well-developed: France, Sweden, the Netherlands and Germany. 

In France, “green” investment is boosted by Article 173 of the Energy Transition Law

In Sweden, pension funds are at the forefront of the green investment trend. 

"In the Netherlands, there is clear demand in society for the environmental transition and its financing, as the recent elections have shown,” explains Ingmar Schuurmans, Manager for Responsible Investment at the Dutch Association of Investors for Sustainable Development (VBDO). He adds: "Our large pension funds, like the ABP (National Civil Pension Fund), have a history of proactive and visible green investment strategies.”

The situation in Germany is paradoxical: despite strong public concern about the environment, the growth of green funds remains modest. According to Alex El Alaoui, Environmental and Social Risk Analyst at Salm & Partners, an asset manager that offers thematic funds, the demand for climate-related products is increasing, but the phenomenon is recent. Keeping things in perspective, the COP 23 conference in Bonn could launch a broader divestment movement targeting fossil fuels. This would strengthen demand for financial products that have ambitious environmental targets. Since 2016, a number of German cities have pledged to stop investing in fossil fuels, including Düsseldorf, Stuttgart and Berlin.

Anne-Catherine Husson-Traore


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