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​ESG roundup: Baltic blue bond, PRI signatory growth

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Folksam, AMF and AP3 are among Swedish pension funds investing in a five-year “blue bond” issued by the Nordic Investment Bank (NIB), its first such instrument. 

The proceeds of the Nordic–Baltic Blue Bond will go to support the bank’s lending to selected water management and protection projects, NIB said.

Launched as a SEK2bn (€195m) deal, the issue’s final order book reached over SEK3.2bn, with 21 accounts participating, the bank said.

Some 48% of the issue was taken up by pension funds, and 89% of all investors subscribing were from Sweden, according to data from NIB.

It said: “The transaction attracted strong interest from dedicated green investors and committed mainstream accounts such as AMF, AP3, Captor, Cliens Kapitalförvaltning, Handelsbanken, LF Jönköping, LF Treasury, SEB Investment Management, WWF and Öhman Fonder.”

Folksam Group was also mentioned as an investor in the issue.

Michael Kjeller, head of asset management and sustainability at the Folksam Group, said: “Sustainability, not least in relation to the Baltic Sea, is something very close to our clients’ hearts.

“We welcome the efforts from NIB to enable this type of bond,” he said, adding that with this investment, Folksam was taking yet another step towards a sustainable world.

The blue bond is listed on Nasdaq Stockholm, and the lead manager is SEB.

PRI signatory growth 

The Principles for Responsible Investment (PRI) had 2,232 signatories at the end of 2018, a 21% increase on the previous calendar year, it reported yesterday.

Growth in the signatory base was particularly strong across US and Canada, as well as in the UK and Ireland, it said. 

Newcomers included the corporate pension funds of Novartis in Switzerland and National Grid in the UK, the Employees’ Retirement System of the State of Hawaii, the Government Pension Fund of Thailand, and insurance groups AG2R (France) and Swiss Life (Switzerland).

”Despite concerns over loss of momentum around issues such as climate change — as noted in the recent Global Risks Report by the World Economic Forum — investors are becoming aware of the risks and the opportunities around ESG factors,” said the PRI.

“Continued growth in demand from global investors, their clients and beneficiaries for investment products and solutions that consider ESG issues, as well as stronger regulatory guidance on responsible investment in many countries, especially within the EU, is also fuelling signatory momentum.”

According to the World Economic Forum (WEF) report, global risks were intensifying ”but the collective will to tackle them appears to be lacking”. 

Prepared by the WEF with Marsh & McLennan Companies, a global professional services company, and Zurich Insurance Group as strategic partners, the report includes the results of an annual survey on global risks perception. Environmental risks continued to dominate, according to the latest report, this year accounting for three of the top five risks by likelihood and four by impact.

“Extreme weather was the risk of greatest concern, but our survey respondents are increasingly worried about environmental policy failure: having fallen in the rankings after Paris, “failure of climate-change mitigation and adaptation” jumped back to number two in terms of impact this year,” the report noted.

The February edition of IPE magazine will include a special report on green finance, with a tinge of blue to it 

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