UN Climate Summit: Major investors commit to develop green bond market

Statement from $2trn investor group at New York meeting

Californian pension giant CalSTRS, Swedish buffer pension funds AP1, AP2, AP3 and AP4 and others are among are a group of investors, worth a combined $2tn, who have today committed to help grow the green and climate bonds market as part of a strategy to address threats to investment performance from climate change as well as urging corporates and governments to support the market.

The statement, which also has backing from Mirova, Natixis Asset Management and the Australasian Investor Group on Climate Change, calls on a number of actors to help catalyze the burgeoning sector. This includes governments through policy, regulation, and tax breaks; industry experts through developing standards for measuring climate change impacts and issuers through transparency around the use of proceeds and their impact.

The statement says the investors understand that they have a responsibility to address threats to the future performance of their investments from climate change, as well as a responsibility to secure their clients’ savings through sustainable and responsible investments.

Erik Jan van Bergen, chief investment officer at ACTIAM, the €44bn Dutch asset manager formerly known as SNS, said: “Climate change is real. Mitigating and adapting to it are vital challenges for societies worldwide.”He added: “Gigantic investments are needed. These amounts are investments yielding a return, they are not costs. To provide the necessary capital, we need to activate the world’s large debt capital markets. Green bonds and climate bonds are a means to do so.

“We stand ready to invest. ACTIAM intends to further increase its climate bond holdings of €500m, subject to market conditions and client demand, to €1bn by the end of 2015.”

The new statement comes amid a slew of sustainable investment announcements coinciding with the UN Climate Summit in New York.

A number of new green bonds have come to market in recent weeks. The French development bank AfD has just issued its first €1bn climate bond and says it intends to be a regular issuer in the market.

And the Overseas Private Investor Corporation (OPIC), the US development institution, has today issued its first “green guaranties”, US government-guaranteed certificates of participation that adhere to Green Bond Principles. Proceeds of $47m will go to the construction of the Luz del Norte solar project in Chile.