Investors will now be given a unique option of being repaid in either carbon credits or cash as the London Stock Exchange today welcomes a first-of-its-kind bond, issued by the IFC – part of the World Bank Group.
Listed in London, the five year, 1.546 per cent coupon bond raised $152m from a wide range of international investors, to support private sector development and prevent deforestation in developing countries.
Nikhil Rathi Chief Executive Officer, London Stock Exchange plc said:
“As global investor attention increasingly turns towards more sustainable and environmentally focused assets, there is a pressing need for financial innovation to help channel and support the redeployment of capital towards these ends.
“That’s why today’s IFC listing is so important and the choice of London as a listing venue so telling. Developing London as a leading international hub for green finance is vitally important to the city and a key driver behind the launch of our dedicated Global Sustainable Investment Centre this week. Today’s listing is an important step in our mission to create in London, the most climate–aligned investment environment in the world.”
IFC’s Forests Bond demonstrates the power of innovative capital-market mechanisms to unlock private sector funds for forest protection.
Jingdong Hua, IFC Vice President and Treasurer said:
“Halting deforestation is essential to meet the global community’s climate goals. To do that, we need to mobilize $75 billion to $300 billion in the next decade. Much of this needs to come from the private sector. IFC’s Forests Bond demonstrates the power of innovative capital-market mechanisms to unlock private sector funds for forest protection.”
Fiona Wild, BHP Billiton Vice President Sustainability and Climate Change said:
“The Forests Bond will direct investment for the benefit of the climate, forests and communities and creates a financial incentive for preventing deforestation and investing in low-carbon development. Our support for the Bond is part of our commitment to scale-up private sector investment in REDD+, stimulate demand for REDD+ credits and demonstrate the value of reducing deforestation as one of the most cost-effective climate change solutions.”
London Stock Exchange Group is a pioneer in supporting the growing global green and sustainable financing movement, providing a comprehensive green and sustainable product offering.
- 39 green bonds issued by international institutions, municipalities and corporates are listed on London Stock Exchange in 7 currencies, having raised $10 billion
- In 2016 alone, 13 new green bonds in 5 different currencies have raised approximately $4.59 billion
- In 2015, LSEG launched dedicated Green Bond Segments across its fixed income markets, offering a flexible range of market models, open to retail and wholesale investors
- On Monday, 7 November FTSE Russell, the global index provider, announced the creation of a new index, the FTSE All-World Ex CW Climate Balanced Factor Index, the first to combine a smart beta factor approach alongside climate change considerations
- The index has been chosen by Legal & General Investment Management for its new Future World Fund, which HSBC Bank UK Pension Scheme has selected for its equity default option, worth £1.85 billion, in its DC scheme.
- There are 38 ‘green companies’ which have raised $10 billion combined in London including, 14 renewable investment funds
- London Stock Exchange is home to a number of global first green bond issuances from India’s Axis Bank, China’s Agricultural Bank of China, Japan’s Development Bank of Japan and the IFC, a member of the world bank group
- LSEG is a member of the UN Sustainable Stock Exchange initiative
Further information can be found online at our Global Sustainable Investment Centre