Catastrophe bonds have become a core holding in many multi-asset portfolios since the start of the asset class in the mid-1990s, mostly due to their low correlation to traditional financial markets. In the past 20 years, catastrophe bonds have delivered more than 7% return per year and the asset class has grown to more than USD40bn of notional value. As sustainability-related topics have become more important, catastrophe bonds have emerged as an asset class of special interest from an ESG/SI perspective. While they are exposed to certain ESG-related risks, mostly climate change, they provide the financial capacity needed to reinsure residential properties against the effects of climate change. Sponsoring by the World Bank and the World Health Organisation in recent years highlight the acceptance of catastrophe bonds as a sustainable asset class.