Pension funds lead in green bond investments, defying market trends
A study by Martijn Boermans at the Dutch central bank DNB reveals that pension funds are significantly outpacing banks and insurers in their investments in green bonds. Dutch pension funds, in particular, have allocated a substantial 7.4% of their bond portfolios to green bonds, compared to 3.5% for the average European investor and 1.5% globally.
A study by Martijn Boermans at the Dutch central bank DNB reveals that pension funds are significantly outpacing banks and insurers in their investments in green bonds. Dutch pension funds, in particular, have allocated a substantial 7.4% of their bond portfolios to green bonds, compared to 3.5% for the average European investor and 1.5% globally.
This trend is partly attributed to pension funds’ long-term, high-quality bond preferences and their indifference to green bond prices. The popularity of green bonds among Dutch pension funds may stem from societal pressure for sustainability and the expectation of future demand growth.
While the greenium (premium for green bonds) has been declining due to increased supply, investors remain discerning about the ‘greenness’ of these bonds, raising the possibility of a resurgence with the advent of an EU green bond standard.
