Are green covered bond impact reports reliable?
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Abstract
This study aims to provide an overview of the current impact assessment methodologies of green covered bonds using residential and commercial real estate collateral based on a few recent examples in Germany, Poland and Hungary. The study recalls the various impact recommendations and provides insight into what is currently included in impact assessments. It also reviews the methodology and some data sources used by impact assessment providers. Green-covered bonds are still a very young asset class but as it has grown, so has investor interest in impact reporting to inform decision-making processes, analysis and investor reporting. At the same time, impact reports still show significant variability and very different levels of transparency. In addition, this paper highlights some of the missing links and data in the environmental impact assessment of real estate-backed bonds in general.
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