“Notable also is the $12.5 billion of green bonds that were certified under the Climate Bond Standard,” said VanEck. “This means that a third party was engaged to verify the green credentials of the projects financed, and that post-issuance reporting standards are adhered. In 2016, $7.3 billion of green bonds were certified under this standard, demonstrating growing investor demand for this level of assurance. In addition, 87% of the bonds issued this year received a second-party opinion, meaning that the issuer engaged an independent organization to review the bond and the issuer’s green bond framework against the Green Bond Principles, and in many cases assess the ‘green-ness’ of the projects financed.”

Related: Bond ETF Investors Should Consider ESG Theme Potential

GRNB has an effective duration of 6.66 years. Duration measures a bond’s sensitivity to changes in interest rates.

Green bonds also often feature low correlations to other fixed income assets, a possible advantage for income investors at a time of diverging monetary policies throughout much of the developed world.

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