Four Key Insights into Establishing the California Green Bond Market

Green Bond Issuance
The green bond market is growing exponentially. Momentum is likely to continue as a growing number of states, counties, and municipalities look for ways to finance green projects, including sustainable energy, transportation, clean water, and forestry.

But while many California investors may be aligned with environmental, social and governance (ESG) investing principles in spirit, misconceptions and knowledge gaps may keep them out of green bonds.

Our recent survey of California residents, conducted in conjunction with the California State Treasurer’s Office, uncovered four key insights that matter to policy makers as they look to structure a bond market that will encourage individual participation.

1. Californians want their assets to make a difference

The California investors we surveyed have a strong personal connection to their assets. In fact, nearly eight in ten say they want their investments to reflect their personal values. This is consistent with what we’ve found in our global investor survey.

  As California goes, so goes the nation CA US*
heart Want their investments to reflect their personal values. 77% 75%
hands Want to know that their assets are doing social good. 76% 69%
windmill Want to invest in companies with good environmental records. 78% 73%
shield Want to invest in companies that have a positive social impact. 77% 68%
gavel Want to invest in companies that are ethically run. 82% 84%

Can access to sustainable investments drive positive financial behaviors? Findings from our most recent survey of defined contribution plan participants1 also support this idea.

Insight 1 Pig6 in 10

Learn more about how the values of California investors affect their investing habits. Download the report.

2. A lack of awareness may lead to misconceptions about green bonds

Even though global issuances are growing, green bonds are a relatively new investment concept for both institutions and individuals. In fact, many California residents don’t know what they are.

Pie 53 Pie 29 Pie 13

See how lack of awareness impacts how California residents feel about green bonds. Download the report.

3. Personal benefits come before societal benefits

While Californians have strong convictions about sustainable investing, they’re not losing sight of financial goals and investment performance. In fact, they look at those first, just as they do with traditional municipal bonds.
(% Yes, multiple answers allowed)

55A1 51A1 39A1 30A  23A2

Take a deeper dive into what motivates California residents to invest in municipal bonds. Download the report.

4. Choosing green bonds is based on financial—and non-financial—factors

Like traditional municipal bonds, when California investors consider state-issued green bonds, they’ll likely want to be assured of the quality of the underlying investment.
(% Yes, multiple answers allowed)

Insight 4 chartA
 7 in 10

Get insight into why California investors select green bonds--and learn which sources they use to inform their decision. Download the report.

Read the full Report

California green bond success with individual investors likely hinges on public outreach and education. Read the full report for deeper insight into how California residents would be likely to participate in a green bond market.

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