NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, June 14, 2016

Advisors interested in socially responsible investing should not limit themselves to stocks as the only asset class to capitalize on environmental, social and corporate governance (ESG) standards or social impact initiatives such as serving poor communities. They should also consider SRI bonds, most commonly known as green bonds.

That market is surging and poised to double in size this year to $175 billion to $185 billion, according to a new report from Bank of America Merrill Lynch. A Chinese bank, Shanghai Pudong Development Bank Co Ltd, is the single biggest corporate issuer of a green bond this year, having sold $5.33 billion worth of debt. In the U.S. the biggest corporate green bond issuer is Apple, which issued $1.5 billion worth of green bonds.

“Apple has been one of the most ground-breaking [issuers] — being the largest single Green Bond issued by a US corporation and the largest from a non-pureplay corporate,” the authors of the Bank of America Merrill Lynch report wrote. “This could potentially open the floodgates for other major companies to enter the market.”