Seeking Shelter From the Storm

Seeking Shelter From the Storm
  • Recent severe storms and flooding in the Indian subcontinent, China, Caribbean, and US illustrate the devastating impact that natural catastrophes have on people and economies. As it becomes increasingly clear that we may be locked into at least a 2.0°C warming scenario, it is essential that we turn more of our attention to helping our communities adapt to the effects of climate extremes.
  • While many are aware 2.0°C warming will increase the frequency and ferocity of tropical storms, cause sea levels to rise by several meters, crop yields to deteriorate, and is expected to drive the migration of millions of people,[i] adaptation remains critically underfunded.
  • We use our SPECTRUM Bond® criteria to review both bond issuer and issuance of labelled green bonds and non-labelled impact aligned bonds. We actively engage with issuers to understand the objectives of the projects and use of proceeds and that sufficient transparency will be provided to enable us to monitor and report to our investors their impact.
  • Based on our 2016 average holdings in the US$ Impact Enhanced Cash fund, direct adaptation projects received 12% of the proceeds, combined mitigation and adaptation projects 10%, and pure mitigation projects 78%.
  • While mitigation considerations may continue to receive the lion’s share of attention within green bond funding, we believe it is just as imperative that adaptation financing grows in parallel.