Such “semi-public” issuance helps to address the problem of information asymmetries associated with new financial products. However, the public sector can also support the development of green finance in its role as investor. In the German public sector, sustainable investment recently gained momentum, especially for equity investments.
The Bundesbank has several mandates of public sector entities, notably pension funds for federal and state governments’ civil servants. While we are responsible for the operational implementation of investment decisions, it is the clients’ task to define sustainability criteria. In some cases, sustainability criteria are already applied, through passive replication of a green equity index preselected by our customers.