AIIB touts the ESG bond structure to simplify the verification process


Last month, when the Asian Infrastructure Investment Bank tested investors’ appetite for a 500 500 (US 39 39,000 million) “sustainable kangaroo” bond, it made an unusual proposal: give the bank a rate for Australian dollar-denominated notes, not five-year ones.

Debt payments are usually assessed individually by rating groups. But the Beijing-based Development Bank, which plans to borrow a 10 billion this year, is developing a new framework for evaluating its sustainability credentials at an institutional level, which could Will then be applied It issues all bonds.

“If you’re an investor, what tools do you need to judge what really matters and be reassured that what you’re touching, what you’re investing in your capital, that’s why you’re really committed to supporting?” AIIMB treasurer Domenico Nardelli told the Financial Times.

One of the “major barriers” to sustainable investment Lack of taxes Or standards are agreed between countries for screening and monitoring of funds and projects, he added.

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“We said: ‘We will see that we can overcome some uncertainty and really put the issuer – AIIB – on the market as a sustainable issuer.’ . . If you are a potential investor in a bond issued by AIIB, you do not have to worry about which bond you are going to buy, ”he said.

AIIB 193. Its membership has doubled in about 103 countries since then 201 was launched And ৯ 24.15 billion in funding across 119 projects.

The role of the structure comes against a background Concerns about green washing ESG bond market. Some environmental experts have criticized AIIB for monitoring investment.

A portion of the money raised from “Kangaroo Bonds” has been allocated to boost private sector investment in Asian infrastructure. Partnering with asset managers, Who pool portfolios of loans in investment-grade trenches.

However, Environmental Promotion Group, Inclusive Development International has expressed concern over AIIB’s efforts to increase private investment in Asia. Using third party managers.

“AIIB has inevitably exposed itself to the risk of unintended reactions without further risk and in-depth performance evaluation at the project stage,” the group, China Dialogue, an environmental news website, wrote on Tuesday.

IDI wrote, “These projects have been exacerbated by the ineffectiveness of managed transparency, no public disclosure of portfolios and no disclosure of how the bank interacts with fund managers.”

IDI partners AIIB with the oversight and asset management groups with which it partners and requests them to increase their oversight of the companies in which they invest.

Bond issuance has doubled to $ 700 billion over the past year as green, social or sustainable, taking companies as a total of $ 1.7tn, according to Climate Bond Initiative.

AIIB executives believe their new bond structure could be adopted internationally by other sustainable development banks.

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