CAPITAL (MIS)-ALLOCATION

We have analyzed the Green Bond impact reports which represent EUR 10,000,000,000 of capital flow aiming at having an impact on climate mitigation.

Around EUR 4,500,000,000 was invested in real estate, and EUR 5,500,000,000 was invested in renewables. The impact of one euro invested in renewable was 81 times higher than the same euro invested in real estate.

If impact is the objectif, is real estate the right asset class ?

The table below present the details of all the Green Bond Impact report analyzed as well as a link to the source of the information.

The impact of one Euro invested in renewable energies was 2,273 times higher than one Euro invested in real estate.

Real Estate:

Amount invested : EUR 88,396,567
Annual tCO2e avoided : 309 tCO2e/year
Cost per tCO2e : EUR 286,073

Renewable:

Amount invested : EUR 184,116,269
Annual tCO2e avoided : 146,291 tCO2e/year
Cost per tCO2e : EUR 1,259

Source: https://sebgroup.com/siteassets/investor_relations1/green-bonds/seb_green_bond_investor_report_2018.pdf

(as 0f 20/02/2020)

SEK vs EUR exchange rate assumed at 0,095 EUR/SEK

The impact of one Euro invested in renewable energies was 1,996 times higher than one Euro invested in real estate.

Real Estate:

Amount invested : EUR 567,920,000
Annual tCO2 avoided : 3,743 tCO2e/year
Cost per tCO2e: EUR 151,715

Renewable:

Amount invested : EUR 832,784,000
Annual tCO2e avoided : 10,972,870 tCO2e/year
Cost per tCO2e: 76 EUR

Source:

https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/climate-bonds/WBC_climate_bond_impact_report_2019.pdf

(as 0f 20/02/2020)

A$ exchange rateassumed at 0.62 EUR/A$

The impact of one Euro invested in renewable energies was 147 times higher than one Euro invested in real estate.

Real Estate:

Amount invested : EUR 202,000,000
Annual tCO2e avoided : 2,500 tCO2e/year
Cost per tCO2e: EUR 80,800

Renewable:

Amount invested : EUR 245,000,000
Annual tCO2 avoided : 445,600 tCO2e/year
Cost per tCO2e: EUR 550

Source:

https://www.nordea.com/Images/33-272930/Nordea%20Green%20Bond%20Impact%20Report%20July%202018.pdf

(as 0f 20/02/2020)

The impact of one Euro invested in renewable energies was 51 times higher than one Euro invested in real estate.

Real Estate:

Amount invested : EUR 1,096,154,836
Annual tCO2e avoided : 23,027 tCO2e/year
Cost pertCO2e : EUR 47,603

Renewable:

Amount invested : EUR 3,816,233,176
Annual tCO2e avoided : 4,126,160 tCO2e/year
Cost per tCO2e: EUR 925

Source : https://www.ing.com/web/file?uuid=e7af477c-75b4-43c9-abfd-0e76b8fb1964&owner=b03bc017-e0db-4b5d-abbf-003b12934429&contentid=47072&elementid=2081945 (as of21/02/2020)

The impact of one Euro invested in renewable energies was 12 times higher than one Euro invested in real estate.

Real Estate:

Amount invested : EUR 299,000,000
Annual tCO2e avoided : 4,893 tCO2e/year
Cost per tCO2e : EUR 61,108

Renewable:

Amount invested : EUR 201,000,000
Annual tCO2e avoided : 40,066 tCO2e/year
Cost per tCO2e: EUR 5,017

Source: https://www.kbc.com/en/system/files/doc/investor-relations/7-Debt-issuance/Green-Bonds/20190521_KBC_Green_Bond_Impact_report_2019.pdf

(as 0f 20/02/2020)

Real Estate:

Amount invested : EUR 1,806,000,000
Annual tCO2e Avoided : 116,000 tCO2e/year
Cost per tCO2e: EUR 15,561

Renewable:

Amount invested : n/a
Annual tCO2e avoided : n/a
Cost per tCO2e: n/a

Source: https://www.berlinhyp.de/en/investors/green-bonds?file=files/media/corporate/investoren/green-bonds/green-bonds/reportings/en/berlin-hyp-annual-reporting-green-bonds-v4-2604-20190403.pdf

(as 0f 20/02/2020)