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UBS Says Investors Should Prefer Green Bonds Over Regular Debt

  • Sustainable notes more resilient than non-green, data show
  • Issuance shouldn’t be hurt as projects are happening, UBS says
Storm Eases Over Windfarms
Photographer: David McNew/Getty Images

Sustainable bonds are a “defensive opportunity” that credit investors should favor over non-green, investment-grade corporate notes, said UBS Global Wealth’s head of credit, Thomas Wacker.

Most industries that have been overwhelmed by the impact of the coronavirus and a slump in crude oil prices -- including oil and gas, basic materials, consumer discretionary and autos -- are “pretty much nonexistent” in the green bond market, Wacker said in a telephone interview Friday. Instead, sustainable debt issuance has been highly concentrated among more conservative sectors like utilities, banks and to a lesser degree, cyclical industrial names.