HELP & SUPPORT LOCATIONS CONTACT US LOGIN Our Solutions Who We Serve Insights About Us Search Sustainable Bonds, What They Are and Incorporating Them in Portfolios Eric Jussaume SVP, Senior Portfolio Manager & Director of Equities Aimee Forsythe, CFA SVP, Senior Portfolio Manager Lindsey Donovan AVP, Analyst December 3, 2020 INVESTING & ECONOMY Share Time to re-evaluate your financial future? Our wealth management professionals can help. Learn More . Get in touch For more information about our wealth management services, call 844-251-0099 Email Us Home Insights Investing & Economy Sustainable Bonds, What They Are and Incorporating Them in Portfolios As investors continue to integrate sustainability into their investments, the demand for bonds that are targeted towards sustainability is growing. These types of bonds include green (or blue) bonds, social bonds and sustainability bonds. What are Green Bonds? Green bonds, whose proceeds are used to fund environmental projects, are playing an increasing role in helping issuers to meet environmental goals and initiatives. The first green bond was issued in 2007 by the European Investment Bank to finance climate-related projects. The green bond market now exceeds $1 trillion with bonds issued by corporations, municipalities, and sovereign nations. Examples include bond proceeds to increase renewables, improve water efficiency or recycling, remodel facilities to LEED standards and upgrade transportation systems. Corporations are the largest issuers of green bonds in the US, particularly companies in the utility and real estate sectors. Social and Sustainability Bonds Social bonds are issued to fund projects focused on positive social change, including initiatives around infrastructure improvements, access to essential services, affordable housing and socioeconomic advancement. The social bond market is younger, dating back to 2013 when the International Finance Corporation began the "Banking on Women" bond program. Since then, the market has continued to grow and is now over $15 billion. Foundations have also begun to issue social bonds for grantmaking. Recently, the Ford Foundation issued a social bond to fund organizations engaged in social justice. Sustainability bonds, which may combine environmental and social projects into one issue, have also grown in issuance. Due to high demand for all of these new bond types from SRI investment strategies, issuers are often able to achieve a very competitive and attractively low costs of capital when issuing in these formats. We consider all of these bond types for our SRI bond strategies and scrutinize the financials for credit worthiness and relative value. We will not purchase green, social, or sustainability bonds that do meet our fundamental credit standards in addition to the positive causes they support. We have made initial investments in some of these markets and expect to be adding more in the future. You May Be Interested In Previous WEALTH PLANNING Women Have Taken a Retirement Hit this Past Year – How Can They Recover? MARKET PERSPECTIVES Fall 2021 Market Perspectives AUDIO / VIDEO Q3 2021 Wealth Management Update Next Our Solutions Wealth Management Business & Commercial Banking Private Banking Who We Serve Individuals & Families Businesses Nonprofits & Institutions Insights Investing & Economy Market Perspectives Wealth Planning Trusts & Estates Elder Fraud Prevention Credit & Lending Cybersecurity News & Updates Audio / Video About Us Our Approach Heritage & Values Community Commitment Sustainability Careers News Investor Relations Follow Us LinkedIn Twitter Facebook Privacy Disclosures Copyright © 2021 Cambridge Trust. All Rights Reserved. NMLS Unique Identifier #697495 Investments are not FDIC insured May lose value Not bank guaranteed Not a deposit Not insured by any government agency