(Bloomberg) – Central banks are increasingly interested in environmentally sound and socially responsible investments, with 43% of respondents to HSBC’s 2021 Reserve Management Trends Survey saying they would buy green bonds.
The survey, conducted between February and April, revealed that officials from 57 central banks, with assets worth US $ 3.8 trillion, were already incorporating social and environmental criteria into decision-making or were evaluating doing so. Only 25% of the entities did not join the trend, citing the lack of compatibility with the mandates as the main reason for not doing so.
At a time when Europe wants to become the world’s largest issuer of green debt, the president of the European Central Bank, Christine Lagarde, has made work on climate change a priority.
Climate change is a key element of the strategic review currently being carried out by the ECB, and monetary authorities elsewhere are also addressing the issue.
Last year, the Swiss National Bank excluded coal miners from its equity portfolio, while this month, the Bank of Japan gave one of its strongest signals yet that the need to take action against change weather was on his radar.
At 43%, the proportion of entities holding green bonds was higher than inflation-linked bonds or mortgage-backed securities. Interest in green bonds was particularly strong among high-income countries, according to the HSBC-sponsored survey.
Central banks have responded to the COVID-19 pandemic with record stimulus, with the survey finding that reserve managers cited the underperforming environment as their biggest challenge. Particularly in high-income countries, they were considering investing in new asset classes.
In the long term, digital currencies were seen to have an impact on reserve management, according to the survey.
Original Note: Central Bank Portfolios Worth $ 3.8 Trillion Look to Go Green
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