The Asian Infrastructure Investment Bank (AIIB) and Amundi, Europe’s largest asset manager, have announced a US$500 million Asia Climate Bond Portfolio, which aims to accelerate climate action in the bank’s members and address the underdevelopment of the climate bond market.
The Asia Climate Bond Portfolio will invest in labeled green bonds and unlabeled climate bonds and engage with issuing companies to help them transition their business models to increase climate resilience and green leadership.
The Asia Climate Bond Portfolio will begin investing in January 2020. The emerging market corporate debt strategy will be managed by Amundi’s Global Emerging Market Debt portfolio management team, based in London and whose members each has an average of over 17 years’ professional experience. This team is part of the broader Emerging Markets Investment platform, which manages US$50.5 billion in dedicated EM Equity, Fixed-Income and Cross-Assets strategies.
Amundi and AIIB have developed a Climate Change Investment framework, which takes into account three variables - portion of green business activities, climate mitigation and resilience to climate change - to analyze issuers’ ability to cope with climate change.
“I am glad to see that a new financial innovation will help support the emergence of green leaders in Asia,” says economist and policymaker Professor Lord Nicholas Stern who also sits on AIIB’s International Advisory Panel.
“This comprehensive approach favored by a new public-private partnership between AIIB and Amundi, focusing on the various dimensions through which climate change can impact businesses (including transition risks and physical risks) could help a great deal in mobilizing very large amounts of money for climate action and the energy transition in critical regions of the world. We should expect strong performance - more responsible investment and more modern techniques offer better returns,” says Stern.
In July, AIIB announced a US$500 million portfolio that aims to develop debt capital markets for infrastructure, drive responsible investing in fixed income, and build a sustainable ESG ecosystem in emerging markets in Asia.
Amundi is Europe’s largest asset manager by assets under management and ranks in the top ten globally. It manages 1.49 trillion euros (US$1.64 trillion) in assets. Headquartered in Paris, Amundi has been listed on the Paris Stock Exchange since November 2015.