Green finance as an investment tool
Green finance is gradually gaining popularity in Russia, although such bonds have long been used by large companies in Europe and the US. One of the first companies to place green bonds was Russian Railways, and other large corporations, including Gazprom, have taken their cue from it. Another step for the development of this direction was the announcement of Sovcombank and the St. Petersburg Stock Exchange. The companies intend to jointly launch green bonds trading and improve the rules and regulatory base for such operations.
Bonds of this type are aimed at investing in clean energy and reducing carbon dioxide emissions. The importance of such projects is noted in many countries, popularizing this investment option. Russia is still lagging behind, because there are no clear regulations at the state level.
Green bonds make it possible to reduce the cost of financing environmental projects, as well as to follow a sustainable development strategy. Moreover, this type of securities helps diversify portfolios. Over the past 6 years, the green bond market has increased 25-fold, and last year the amount here totaled $300 billion. Experts predict that by the end of 2022, the volume of the Russian and CIS markets will reach a record high level. There is a positive trend, with more and more financial institutions, funds and companies following the concept of sustainability, and favoring companies that care about the environment and their activities are environmentally friendly.Analysts note that the growing interest in green bonds is associated with a change in approaches to investment. In this financing option, important attention is paid to the project itself and its assessment and compliance with environmental principles. At the same time, the funds received from the sale of bonds should go exclusively to such programs.
If we consider the activity in this segment in other countries, the leader in Europe is Germany, and in the U.S. actively manifested itself companies from California.
According to VTB Capital analysts, last quarter showed record volumes of green bond placements. If such dynamics continues in the future, then by 2023 we can expect the amount of 2 trillion dollars. Experts say green finance has great potential in Russia, but the government will need to support its development. An important point is the reduction of the tax burden for investors. In addition, a good stimulus for the popularization of the direction will be the example of large funds that diversify portfolios with green bonds.
The development of such investments in the country is also hindered by a number of legislative peculiarities. For example, only large companies with a high credit rating can issue bonds.