The Lombard Odier Climate Bond Fund, managed by Affirmative Investment Management (AIM), has been named ‘Best Green Bond Fund of the Year’ in the Environmental Finance 2018 annual awards.
With the winners of these prestigious awards decided by a panel of major participants within the green bond market, this accolade is clear recognition of AIM’s pre-eminence in impact bond investing. We believe it endorses AIM’s pure play focus, investing only in green and social impact bonds which withstand our rigorous in-house verification process, as well as our commitment to providing detailed impact reporting on every strategy we manage.
Please find below a link with more detailed information about the Environmental Finance announcement and do not hesitate to contact us if you would like to discuss this, or other recent developments within AIM.
Four groups have cooperated to create the “Carbon Yield,” a new standard for assessing green bonds.
Introduced by London-based Lion’s Head Global Partners, in cooperation with South Pole Group, Affirmative Investment Management and the Rockefeller Foundation, Carbon Yield quantifies the “greenness” of a “green” bond, a security used to finance carbon mitigation.
The new measure is intended to bring transparency to the green bond market, as investors can use Carbon Yield to determine the level of carbon mitigation of each bond they hold. The measure can also be used on the portfolio level to see the total annual emissions avoided via a client’s fixed-income allocation.
With more and more companies recognising and acting on the risk from climate change in their portfolios, they are beginning to look for alternative assets, which often don’t exist at sufficient scale.
Environmental Finance hosted a round table to explore how conservation projects could be scaled up and how more private capital can be attracted to such initiatives.
China’s Three Gorges Corporation issued its first offshore green bond last week. The state-owned firm, which issued the largest corporate green bond in China last year, builds large hydropower projects and has received much criticism for its ESG profile. The Three Gorges dam is the largest hydropower project in the world, flooding 13 cities and 140 towns and relocating more than 1.2m people.
This is the first time Three Gorges has issued an offshore green bond, and it roadshowed in Asia and Europe as part of the process. “China Three Gorges raised the bar in terms of presenting directly to green bond investors on an extended European roadshow,” said Nick Darrant, Executive Director of EMEA Syndicate at JP Morgan, which was a joint global coordinator on the deal, along with Bank of China and Deutsche Bank.
The seven-year deal came in at €650m with a coupon of 1.3%. “We were pleased with the results,” Darrant told RI. However, some European green bond investors did not buy the notes for ESG reasons. “China should be applauded for its commitment to ‘clean’ its energy sector,” said Affirmative’s Kinnersley, who added that Three Gorges is a key part of the national climate strategy. “But a Three Gorges ‘green bond’ should be strongly questioned,” he told RI, pointing to a series of environmental and social risks associated with the dam. These include its apparent contribution to earthquakes, methane emissions and changes to water regimes that harm the fishing industry and biodiversity; as well as the displacement of people. “Unless the green bond compellingly and specifically addresses [these] environmental and social problems… it is likely it is being issued to ‘up the green creds’ of the Three Gorges Corporation. OK. Call it greenwashing. This is why AIMwill not buy the bond at this stage.”