GLOBAL - The World Bank today launched a pension fund-backed green bond. The move came as investors globally urged policymakers to negotiate a new binding agreement to cut global greenhouse gas emissions.
Key investors in the SEB-managed SEK2.325bn (€231m) six-year 3.5% green bond include the Swedish buffer pension funds AP2 and AP3, Skandia and Swedish banking and insurance group Länsförsäkringar.
Money raised from the deal will be spent to stimulate and coordinate public- and private-sector projects to tackle the threat of global warming and all proceeds to the World Bank will be used to finance projects, such as wind farms and solar parks, that cut carbon dioxide emissions in the developing world.
The launch coincides with a call from investors including pension funds and pension fund managers APG, PGGM, the London Pension Fund Authority (LPFA), Norges Bank Investment Management (NBIM) to heads of state and climate negotiators for a strong, binding framework to succeed Kyoto.
The statement was sent by 135 of the world's largest asset managers and pension funds, collectively representing $6.4trn in assets, and warns that clear and long-term policy signals are essential if investors are to allocate the huge amounts of private capital required to fund the transition to a low-carbon economy.
Johan van der Ende, chief inevestment officer at PGGM, commented that a global policy framework addressing climate change "will help us to address climate change risks in our investment decisions and find opportunities for climate friendly investments."
Anne Kvam, global head of corporate governance at NBIM, said that since the global portfolios managed by NBIM are exposed to the economic effects of climate change, NBIM is interested in efficient mitigation and adaptation to climate change.
She concluded that, "A global agreement is the necessary first step."
The statement was co-ordinated by the US-based Investor Network on Climate Risk (INCR), the European Institutional Investors Group on Climate Change (IIGCC), and the Investors Group on Climate Change (IGCC) in Australia and New Zealand, the three leading investor groups on climate change.
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