Public and private sector investors in Denmark, France and Luxembourg have made initial commitments of €235m for the first of three planned vintages of an Amundi-European Investment Bank (EIB) programme to foster the development of new green debt segments.
Investors taking part include Caisse des Dépôts et Consignations (CDC) and social welfare group Agrica in France, and Danish pension fund Lærernes. The EIB has made an initial commitment of €60m.
Yves Perrier, chief executive officer of Amundi, said: “We have seen fantastic enthusiasm for this programme among institutional investors who recognise the importance of energy transition and wish to diversify their sources of yield in a low interest rate environment.”
Launched in July, the Green Credit Continuum programme has the goal of expanding Europe’s green debt markets to help meet climate objectives by investing in green high yield corporate bonds, green private debt and green securitised debt.
These segments, says Jean-Jacques Barberis, co-head of institutional clients coverage at Amundi, are “where the green bond market was 10 years ago”.
The programme is about tackling the demand and supply side of the equation, offering investors diversification and higher yields as well as an opportunity to invest in the decarbonisation of the economy, while a “green transaction network” with banks and issuers will work on sourcing and producing “relevant, high-quality and transparent green debt, financing impactful activities”.
“Europe has demonstrated it is the most mature green bond market in the world and paved the way for the development of that market abroad, but to make the energy transition happen we will need new instruments,” Barberis told IPE.
‘Industrialisation’ as marker of success
The ultimate ambition, he said, is for the programme to “disappear”.
He gave the example of Amundi’s emerging market green bond programme with the International Finance Corporation, indicating it had paved the way for Amundi to next year launch an open-ended fund, accessible to retail and institutional investors, to invest in emerging market green corporate bonds.
“That’s because the proof of concept was made by the first one,” said Barberis. “So then people like us are able to industrialise and then you really start to have potential massive movements of money.”
The aim for the Green Credit Continuum programme is to raise funds for three vintages, and to deploy €1bn in total.
“Let’s hope that in three to four years we’re going to open open-ended funds for green high yield where everybody will be able to invest,” said Barberis.
France’s CDC, which is also a state development bank, made an initial commitment of €50m to the programme in its capacity as an institutional investor.
Laurent Deborde, chief innovation officer in the financial investment division at the public institution, told IPE that most of CDC’s €170bn assets under management are managed internally, but that it delegates a small part of its investments or buys shares in funds for proportionally small amounts for a couple of strategies, one of which is about trying to find innovative investment ideas in areas such as responsible investment.
He said it was as part of this strategy that the French investor committed to the Green Credit Continuum programme.
CDC was attracted by the opportunity to take part in the development of the green debt market “beyond the usual suspects of large listed investment grade companies,” said Deborde.
“ABS, high yield bonds, unlisted companies, these are all of interest to us.”
Deborde also said the programme’s commitment to thorough analysis of instruments’ green credentials and the additionality of new projects appealed to CDC.
“The fact that this programme rests on a very clear policy is certainly a way to develop this market by fostering the credibility of the green labels,” he said.
CDC is a founding member of the Net Zero Asset Owner Alliance, a UN-convened group of asset owners committed to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050.