(Bloomberg) — For the hundreds of investors claiming to target net-zero portfolios, their largest holdings are often their biggest problem. That’s because the $64 trillion global market for sovereign bonds is largely inhospitable to sustainability-minded investing.
Why? There are only a limited number of issuers (fewer than 150 globally compared with more than 70,000 corporate bond issuers), meaning investors risk a much more concentrated portfolio if they seek to avoid climate laggards. Second, some investors have to hold government debt to match their assets with their liabilities, leaving them captive buyers of bonds they might otherwise have shunned.
Given these and other challenges, UK fund manager Abrdn Plc says the “drive…
