21 Oct 2021
The effective integration of ESG factors in government bond markets is still in its infancy relative to other fixed income markets. A ‘green bond’ market is starting to develop in government bonds, which is likely to become more prevalent.
We will monitor these developments carefully, although such bonds might fall foul of some of the problems with corporate green bonds, including a lack of visibility over both the use of proceeds and the source of cash which services coupon repayments - both of which should be green.