French region Provence-Alpes-Côte d'Azur has issued a 12 year, AA-rated, €119.5m “socially responsible” bond with 75% of proceeds going to environmental projects (renewable energy, energy efficiency, transport) and 25% to social housing. The bond was significantly over-subscribed. Coupon is 3.6%; joint bookrunners were Crédit Agricole CIB (bravo Tanguy Claquin!) and HSBC France. Insurance companies made up 58% of investors, followed by asset managers at 33%. A third French, almost a third German, and the rest divided between Belgian and Dutch.
Now why can't we do that too?
I've long been an advocate of local bonds for such purpose here in the UK and it's a core part of the Green New Deal.
Hat tip: Sean Kidney
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While agreeing with the premise, the way forward on green bods and green financing is to disallow these types of bookrunners and investors. HSBC? For goodness sake!
Green bonds/financing should be limited to individual investors making no more than 50k per annum, and I am being generous here.
Do we want real green bonds/financing or do we want just another corporate grab by the 1%?!
We have suggested Green ISAs – £20,000 pa maximum
They’d sell like hot cakes – especially if the alternatives were withdrawn
Can you expand on what ‘removing the alternatives’ would entail?
Yes – I meant removing the broader investment options other than cash.
Sorry to be a pedant/dullard (take your pick!) – has your think tank (or any other) advocated this and do you have any papers outlining what it would look like? – (No nefarious intent here, I am interested in alternatives to abysmally performing mainstream market funds, so alternative ideas are good as far as I’m concerned)
Look in the Green New Deal
And my work on People’s Pensions for a start
Thanks for that – Will do!
Sincere thanks for the links to the People’s pension scheme (not a paper I’d yet read)- It’s a shame neither of the last two governments took any heed of it as I think it’d make an interesting alternative – In terms of ‘removing alternatives,’ I take it that those who wanted to take risks with their money and put it in risky Private Sector funds would still be allowed to do so?
I would not suggest this form of pension be compulsory, I agree
I think you are talking about a concept, not a result. The success will depend on just how efficiently (even in the broadest sense) the funds are used, what the management expenses will be, and how well it is managed. Somewhere dowm the line the success will have to be measured, and measured competently. So it could work, or it could go horribly wrong. The trouble with the “local” concept is that expertise is not always available locally.
I would not trust my own Local Authority to get it right for example
Stephen
I think most people with a privately managed pension would agree that it would be difficult for the public sector to do any worse!
It isn’t rocket science (which is why it would be much better for the UK if people who are bright enough to get 1st in Physics or Maths should be doing rocket science not working in the City). Invest in several areas & spread risk. Understand which areas are high-risk & which low. Simply, every day people that run greengrocers, building firms or restaurants make decisions like that.
Surely the simplest and cheapest way to provide pensions is by the state via a hypothecated tax, like National Insurance Contributions, both employers’ and employees’.
Of course
Call it SERPs