The Anthropocene Fixed Income Institute has published their 2022 Market Trends in the Fixed Income Market.

Here are our three top picks, but it’s well worth reading the full report here:

• Asset owners regularly hold both debt and equity in the same company. From a valuation perspective, there are interesting contrasts between how climate risks are priced in these markets, especially in companies such as the oil majors. We still lack a full model to allocate the carbon footprint between bonds and stocks, which will be helpful both in terms of carbon footprinting. 

• It is clear that the broader philanthropic community is paying greater attention to climate risks and fixed income markets. The impact of this is a new breed of activism, where fixed income investors can also be targeted in campaigns that traditionally used to be deployed directly towards companies or equity backers of controversial activities.

• One of the great events during COP26 happened away from the actual conference. A large bank stepped back from providing a substantial loan to the aforementioned coal mine on what appears to have been considerable pressure from clients, rather than investors.

➔ Read the full report here