We know that ESG funds with higher ESG ratings have fared better during the pandemic than traditional funds. And we also know that ESG investments tended to outperform but mostly because they are tilted towards the tech sector that outperformed during the pandemic. But what about bonds? And especially, what about the new category of green bonds?
You write: "if you are a company thinking about issuing bonds, you should issue green bonds if you can. It looks like they enjoy a more stable and long-term oriented investor base".
Why does that matter to companies? For reputational reasons? My current understanding is that once the bonds are issued, the company has the money and the annual costs don't change. And a company might even prefer volatile bond prices, if it's interested in buybacks. But I might be on the wrong track as I don't know a lot about bonds.
Thank you for the insight, Klement!
You write: "if you are a company thinking about issuing bonds, you should issue green bonds if you can. It looks like they enjoy a more stable and long-term oriented investor base".
Why does that matter to companies? For reputational reasons? My current understanding is that once the bonds are issued, the company has the money and the annual costs don't change. And a company might even prefer volatile bond prices, if it's interested in buybacks. But I might be on the wrong track as I don't know a lot about bonds.