ABOUT THE THEMATIC BONDS MARKET: FORMATION AND DEVELOPMENT IN THE CONTEXT OF THEMATIC INVESTING

Abstract

Thematic investing is an investment strategy primarily associated with sustainable development and close
to the so-called impact investing. It has emerged in the last few years as one of the most discussed investment
strategies in the financial markets. The term "thematic bonds" is an even newer term for the investment community.
Its appearance and popularity are the consequences of the overlay of increasingly innovative and diverse products in
the financial toolbox. "Labeled bonds", "impact bonds" and the abbreviation GSS bonds or GSS+ (from green,
social and sustainable) are also used as synonyms. The investment terminology is too dynamic and without clear
outlines in the context of the turbulent realities and reflections of the markets. Attempts to systematize the
sustainable financial market lead to different and mutually overlapping classifications due to the dynamic nature of
global processes and the emergence of new financial instruments, including those with hybrid characteristics. A
leading reason for the different classifications is the specific taxonomies used to classify green and/or sustainable
finance in individual countries and regions. Furthermore, the most developed taxonomies at this stage are the green
ones, primarily covering climate change. Other sustainable development goals, such as the circular economy,
biodiversity as well as social taxonomies, are less developed.
The article aims to analyze the peculiarities of the formation and development of the thematic bond market, as well
as the emerging challenges determining its place and role in the ecosystem of sustainable finance. In order to
achieve the goal, the author attempts to refine the scope and systematics of thematic bonds, examines the emergence
and reasons for the dynamics of the market, as well as argues the emerging trends. The author also emphasizes the
role of the regulations in the segment and the individual subsegments, helping both to realize the related
sustainability goals and to prevent misleading practices and messages to the investment community. In the course of
the research, the connection between current international events and public needs, on the one hand, and the scale
and structure of the market, on the other, is proven.