EBRD partners Japan’s Government Pension Investment Fund to support sustainable capital markets

By Vanora Bennett

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EBRD approves participation of up to US$ 100 million to support development of green bond markets

The European Bank for Reconstruction and Development and Japan’s Government Pension Investment Fund (GPIF) have recently formed a partnership to promote and develop sustainable capital markets through investments in EBRD’s Green Bonds and Social Bonds.

“We are delighted to partner with GPIF, whose important leadership serves to highlight how financial markets can support the urgent and necessary changes required for a transition to a green and sustainable economy,” EBRD’s Acting Vice President and Chief Financial Officer Paulo Sousa said.

Both the EBRD’s Green Bond and Social Bond programmes were initiated in 2010, and to date the EBRD has issued a total of over €5.5 billion of such issuance.  

The EBRD Green Bond programme has included issuance of Environmental Sustainability Bonds, Climate Resilience Bonds and Green Transition Bonds, all of which are issued in alignment with the Green Bond Principles. The proceeds of all EBRD Green Bonds support portfolios of projects that will significantly contribute to the transition to a low-carbon, resource-efficient and climate resilient economies in EBRD’s countries of operations. Social Bond issuance has focused on two themes: microfinance and health.

“GPIF requires our asset managers to integrate ESG into their investment processes from analysis to the investment decision. We regard the purchase of Green, Social and Sustainability Bonds as one of the direct methods of ESG integration in fixed income investment. GPIF wishes to contribute to make Green, Social and Sustainability bonds mainstream investment products in order to ensure the sustainable performance of the pension reserve fund for all the generations,” said GPIF Executive Managing Director and Chief Investment Officer Hiro Mizuno said.

The partnership between EBRD and GPIF comes amidst growing evidence of the need for urgent and systemic combined action to meet the common goals of the 2015 Paris Agreement on Climate Change, which aims to limit the increase in global temperatures to well below 2°C, pursuing efforts for 1.5°C.

The EBRD is a pioneer in financing projects promoting renewable energy and combatting climate change. Under its Green Economy Transition (GET) approach the EBRD is supporting its countries of operations to build low carbon and climate resilient economies. The Bank is well on track to reach its goal to increase green financing to 40 per cent of its annual business volume by 2020. To date, the EBRD has signed €30 billion in green investments, financed over 1600 green projects and reduced over 100 million tonnes of carbon emissions.

GPIF is the largest pension fund in the world in terms of assets under management.

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