Money markets struggle for green growth

摘要

Despite growing investor appetite, green money market funds will be dead in the water until more issuers start offering climate-friendly commercial paper, according to a new report from Fitch Ratings. Two new programmes launched last week, plus conversions of existing CP and a potential first sovereign issuer, have begun to improve the picture, though.Nearly €150bn was invested in ESG MMFs globally in the first half of this year, after growing by 50% in 2020 - way ahead of the market's overall 20% expansion. Most of these flows have been in Europe, where Fitch estimates they already make up as much as 30% of short-term MMF assets, and a fifth of all MMFs in the region.Moreover, more than €200bn of European MMFs have been reclassified recently. Under the EU Sustainable Finance Disclosure Regulation, they are now Article 8 funds that promote environmental or social characteristics.But a pure green product remains far off. Indeed, no MMF even holds the majority of its assets in ESG instruments yet.