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Green investment frenzy runs risk of becoming a bubble, BIS says

The rapid pace of growth in green investing raises the prospect of a bubble that could burst further down the road, according to the Bank for International Settlements.

Photo: Matthew Childs/REUTERS / X03810

Price-to-earnings valuations for clean energy companies are high and more analysis is needed to understand how green investing is playing out in the credit market, the Basel-based Bank for International Settlements said in its quarterly report published on Monday. 

History indicates that assets related to fundamental economic and social change may experience a significant price correction after an initial surge of interest, according to the BIS analysis, which took as its example 19th-century railroad stocks and the dot.com bubble.  

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