Before exploring how big data captures numerous variables that may illustrate how committed an entity maybe to addressing ESG concerns, we'll first take a deeper look at some of the financial instruments associated with ESG investing, many of which have recently witnessed an increasing groundswell of supply and demand. In the next series of webinars, you should acquire a better picture of the asset rich landscape for ESG Related fixed income products as well as certain exchange traded funds, how to analyze them and ultimately make better informed investment decisions. For example, in the first of this series, James Cardamone, associate director of ESG Product at factset owned True Value Labs, offers insights into green, social, sustainable and sustainability linked bonds. Issuance of these instruments have been on a steep upward trajectory over the past five years with an exceptional rise throughout 2020. The stellar increase has come not only amid government mandates to stay with the COVID-19 pandemic which roiled global economies and financial markets, but also as funding vehicles for sovereign, organizational and corporate projects that are aligned with various sustainability goals. Among other topics, Cardamone explores the allure behind these fixed income products, who is buying and selling them, how they differ from conventional bonds and what purposes they serve within the ESG investing sphere. Stay tuned for the global state of GSSS bonds coming up next. [MUSIC] >> First thing we want to talk about is some of the different types of the ESG-related bonds and some of our 2020 trends and next we'll go down and take a look at the history of the green bond market. Take a little bit of look at the growth that we've seen, especially for the last three years and the and the breakdown of composition. Next, we'll take a look at use of proceeds specifically from 2020. Use a lot of research coming from the CBS state of the market report. Now, and then after that, we'll want to take a look at kind of who's buying these, right? We know that there's a tremendous amount of growth. We want to take a look at the composition of investors and some of their investment considerations. After that, we'll explore the greenium effect, which is something I came across as doing some research, the concept that green bonds are trading at a premium to non green cohorts. And then we'll wrap up taking a look at a demo using both factset and truvalue. We'll take a look how to narrow a green bond screen for the specific use of proceeds and we'll take a look at a specific issue and more detail using truvalue platform. And then we'll follow that up with taking a look at portfolio analysis, in fact, its portfolio analysis, looking at a green body TF versus a comparable global fixed and benchmark. So, first, we just kind of address the different areas of the market in the top left, we're looking at the largest segment, which is green bonds currently around 1.3 trillion in size. It broke the one trillion mark last year and here to date, it's a little over 200 billion. And so that encompasses issuers across sovereign, super nationals, corporate. What I've also included here in this bullet at the top is just some of the components for the green bond principal alignment. So, your use of proceeds, your process for project evaluation selection, your management of proceeds in reporting. In the bottom left, we are looking at the sustainability bonds. So that's a markets around 317 million as of the end of the year with about 200 issuers and similar follows the same sort of components for alignment. And well, I kind of highlighted a specific deal that you can see. So we'll look at alphabets almost $6 billion dollars deal financing both energy efficiency and social issues like affordable housing and racial equity. In the top right, we have sustainability-linked bonds, so a lot smaller in the market, but seeing tremendous growth. End of year was around give or take 20 billion in size. But in 2021, we've seen quite a bit of growth and I believe that's that's actually more than doubled. So it's slightly different than the other three segments because of the nature of how the selection of KPI's and how they're measured. There are no specific use of proceeds with sustainability-linked bonds. So there's a kind of highlighted the criteria selection of KPI's calibration, performance targets bond characteristics, reporting and verification. So, one of the knocks historically on on sustainability-linked bonds is the ability to green wash by a particular issue or just given potential general or vague KPI criteria. So it's something that for investors to consider. And then the last bottom corner we have social bonds similar in size to the sustainability bonds that we saw in the bottom left. Massive massive growth in 2020. The pandemic drove pandemic bombs which fall into the social category and we saw a 10x growth there. Next, we'll take a look at some highlights. Again a lot of this information is coming from CBI, state of the market report. The overall GSS market reached 1.7 trillion. By the end of 2020, there's about 700 billion new issuance and green bonds reached as I mentioned earlier, reached the one trillion mark. And we saw social bonds hit 10x in growth in 2020 namely due to the pandemic bonds. Some of the other things we saw was that Sovereign. She's really took charge. There were a bunch of new issuers that entered the market. Some of those included Egypt, Germany, Hungary, Sweden and the Sovereign area. And then again sustainability bonds also grew very largely as well. One thing to note is that the average size of those Instruments actually doubled to around 630 million per issue. And you can see all this, that's kind of when I was verbalizing in these charts, again, like the massive growth that you can see in 2020 at the bottom left, the breakdown from green social and sustainability over the years, and then the month by month issuance in the bottom right. [MUSIC]
