Fixed income

ESG-focused bond investing gaining momentum

Institutions such as the Asian Infrastructure Investment Bank – and recent studies – are showing why and how investors should analyse the ESG performance of bonds and issuers.
In search of cleaner infrastructure: AIIB is investing in "ESG-aligned" Asian corporate bonds
In search of cleaner infrastructure: AIIB is investing in "ESG-aligned" Asian corporate bonds

Equity investing with an environmental, social and governance ESG focus is clearly gaining momentum in Asia, spearheaded by the likes of Japan’s Government Pension Investment Fund.

But now there’s also a fast-growing body of research showing the positive impact of focusing on ESG elements when investing in bonds and the development of the fixed income market in Asia seems to be reflecting that.

Some institutional investors are already well aware of the benefits of such an approach.

Ever since it began operating in January 2016, the China-backed Asian Infrastructure Investment Bank has found that fixed income assets with higher ESG ratings tend to have...

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