Green bond issues: Picture from Pixabay by Petra Tesarova
6x new research on methane abatement, brown green funds, ESG education effects, green bond issues, bond segmentation, and bad crypto influence (#shows number of SSRN full paper downloads as of March 20th, 2025)
ESG investment research
Cheap abatement: Methane Abatement Costs in the Oil and Gas Industry: Survey and Synthesis by Robert N. Stavins, Forest L. Reinhardt and Joseph E. Aldy as of March 5th, 2025 (#58): “… We find significant potential for low-cost methane abatement in the O&G sector in the United States and elsewhere …. Whereas it appears that cutting methane emissions in half would be relatively inexpensive, a sharp uptick in marginal abatement cost may occur when reductions exceed 60 to 80 percent below baseline levels. This threshold may change over time with technological advances in remote sensing …“ (abstract).
Brown green funds: Finanzrecherche deckt massives Greenwashing in europäischen ESG-Fonds auf von Urgewald und Facing Finance vom 19.3.2025: „… Von den über 14.000 analysierten ESG-Fonds, die in europäischen Ländern gehandelt werden, investierte weit mehr als ein Drittel (4.792 Fonds) über 123 Milliarden Euro in Unternehmen, die fossile Expansionsprojekte vorantreiben oder aber keinen glaubhaften und Paris-konformen Ausstiegsplan aus Kohle vorgelegt haben … Allein auf die sechs größten Öl- und Gasmultis TotalEnergies, Shell, ExxonMobil, Chevron, Eni und BP entfallen Investitionen in Höhe von 23,5 Milliarden Euro. Alle davon haben Expansionspläne, die mit dem 1,5-Grad-Limit unvereinbar sind und die Klimaüberhitzung weiter verschärfen werden … Die neuen Regeln zur Benennung von ESG-Fonds … sind ein erster Schritt in die richtige Richtung. Die Finanzrecherche zeigt jedoch: Von den knapp 14.300 untersuchten Artikel-8/9-Fonds werden zwei Drittel (9.420) durch die ESMA-Leitlinien nicht erfasst, da in ihren Namen keine ESG- oder nachhaltigkeitsbezogenen Begriffe verwendet werden …“. My comment: Portfolios with 0 fossil fuel exposure are easy to develop. At least, fund providers should make potential critical exposures transparent. My monthly reporting see “Potenziell kritische Aktivitäten und Ausschlüsse here: FutureVest Equity Sustainable Development Goals R – DE000A2P37T6 – A2P37T
ESG education effects: The Impact of Sustainable Finance Literacy on Investment Decisions by Massimo Filippini, Markus Leippold, and Tobias Wekhof as of Oct. 29th, 2024 (#354): “Our findings demonstrate that the SFL educational treatment significantly improves literacy …. Participants exposed to the SFL program were more likely to invest in highly sustainable funds by 6 percentage points and less likely to choose less sustainable options with magnitudes between 3 and 2.5 percentage points. The treatment effects increased by up to one half among investors with pre-existing green attitudes. In addition, we provide suggestive evidence that a higher SFL leads to more accurate sustainability perceptions and reduces the tendency to chase high past returns” (abstract). My comment: Good sustainable finance education may not so easy since e.g. investing in Article 9 funds may not be very sustainable (see previous research).
Green bond issues: Sovereign Green, Social, Sustainability, and Sustainability-Linked Bonds by Hyae Ryung Kim and Christina Laskaridis as of March 12th, 2025 (#16): “This study provides an in-depth evaluation of sovereign green, social, sustainability, and sustainability-linked (GSS+) bonds, focusing on their ability to bridge financing gaps for climate, social, and development goals in emerging and developing countries. … this research reveals that these bonds often fail to meet their potential due to high issuance costs, shorter maturities, and administrative complexities. … while sovereign GSS+ bonds in developing markets show promise, they frequently fall short in delivering the “greenium” (reduced borrowing cost) and longer maturity terms needed to fulfill their promise. The study highlights that, in many cases, sovereign GSS+ bonds are issued at rates comparable to or higher than conventional bonds, providing limited financial advantage. Additionally, the effectiveness of these bonds in meeting sustainability targets is challenged by varying reporting standards, risks of greenwashing, and a lack of stringent monitoring” (abstract). My comment: I do not use sovereign bond funds but (also imperfect) ETFs of bonds issues by multilateral development banks.
Other investment research (in: Green bond issues)
Bond segmentation: Investing in Safety by Johannes Breckenfelder, Veronica De Falco and Marie Hoerova as of Nov. 15th, 2024 (#97): “… we exploit the largest ever joint issuance of supranational bonds by the European Commission to link how different investors re balance their portfolios following this large shock to the supply of safe assets. We show that … the marginal investors in supranational bonds … when they acquire Commission bonds, they re-balance away from other supranational bonds and, as a result, the yields on those bonds increase. However, investors do not view the Commission bonds as substitutes for national government bonds. We show that this result is driven by the domestic investors who do not substitute away from national bonds following the Commission bond issuance. Such home bias of domestic investors towards national bonds may help explain why the AAA-rated Commission bonds have substantially higher yields compared to national government AAA-rated securities“ (abstract).
Bad crypto influence: The Impact of Financial Influencers on Crypto Markets: Systemic Risks and Regulatory Challenges by David Krause as of Feb. 19th, 2025 (#151): “… the research has revealed consistent negative returns associated with finfluencer recommendations, the methodological flaws in finfluencer analyses, and the inadequacy of current regulatory frameworks. The Elon Musk and Dogecoin case illustrated the power of celebrity endorsements to manipulate market sentiment, while the Dave Portnoy and LIBRA meme coin controversy exposed the potential for undisclosed agreements and market manipulation … “ (p. 17/18).
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Werbung (in: Green bond issues)
Unterstützen Sie meinen Researchblog, indem Sie in den von mir beratenen globalen Small-/Mid-Cap-Investmentfonds (siehe FutureVest Equity Sustainable Development Goals R und My fund) investieren und/oder ihn empfehlen.
Die Portfoliounternehmen haben einzigartig hohe 99% SDG-vereinbare Umsätze und sehr hohe E-, S- und G-Best-in-Universe-Scores, sehr geringe potenziell kritische Aktivitäten und es gibt ein besonders umfangreiches Aktionärsengagement bei derzeit 29 von 30 Unternehmen.
Zum Vergleich: Ein Gesundheits-ETF hat eine netto SDG-Umsatzvereinbarkeit von 12%, Artikel 9 Fonds haben 21%, Impactfonds 38% und ein ETF für erneuerbare Energien 45% (vgl. Hohe SDG Umsätze? Nur wenige Investmentfonds!).
Insgesamt hat der von mir beratene Fonds seit der Auflage im August 2021 eine ähnliche Performance wie traditionelle globale Small- und Mid-Cap-Fonds (vgl. z.B. Fonds-Portfolio: Mein Fonds | CAPinside). Ein Fondsinvestment war also bisher ein „Free Lunch“ in Bezug auf Nachhaltigkeit: Ein besonders konsequent nachhaltiges Portfolio mit marktüblichen Renditen und (eher niedrigeren) Risiken. Vergangene Performance ist allerdings kein guter Indikator für künftige Performance.