OECD Working Papers on Finance, Insurance and Private Pensions

Selected studies on finance, insurance and private pensions policy prepared for dissemination in order to stimulate wider discussion and further analysis and obtain feedback from interested audiences. The studies provide timely analysis and background on industry developments, structural issues, and public policy in the financial sector. Topics include risk management, governance, investments, benefit protection, and financial education. Previous papers addressing these policy issues are available via http://dx.doi.org/10.1787/19936397.


Defining and Measuring Green Investments

Implications for Institutional Investors' Asset Allocations

This definitional, stocktaking paper aims to provide a comprehensive review of the concepts and definitions related to “green” investments that are currently used in the market place. The purpose of this research is not to take a position on a specific definition but rather to explore what is being generally used, whether there are commonalties and inconsistencies, and what lessons can be drawn from this analysis.

The paper examines how “green” investments are defined across different asset classes (equities, bonds and alternative investments), as well as providing some estimates of the size of these markets. The paper concludes that, given the lack of consensus on the usage and definition of the term “green”, the most productive approach could be to take an open and dynamic stance towards definitions and standards, with international institutions and governments adopting a “governance approach to green investment”.


Keywords: green bonds, environmental, social and governance (ESG), pension funds, socially responsible investment (SRI)
JEL: J26: Labor and Demographic Economics / Demand and Supply of Labor / Retirement; Retirement Policies; G18: Financial Economics / General Financial Markets / General Financial Markets: Government Policy and Regulation; G15: Financial Economics / General Financial Markets / International Financial Markets; G28: Financial Economics / Financial Institutions and Services / Financial Institutions and Services: Government Policy and Regulation; G23: Financial Economics / Financial Institutions and Services / Non-bank Financial Institutions; Financial Instruments; Institutional Investors
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