Fixed income

Folksam Presents $350m Green Bond Investment at UNGA

Stockholm (NordSIP) – Swedish insurance company The Folksam Group presented its acquisition of green bonds to the tune of USD 350mn issued by the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to the 9th annual United Nations Private Sector Forum during the 72nd Regular Session of the UN General Assembly yesterday (September 18).

The UN Private Sector Forum was convened this year to adopt a new principle-based approach to global finance that mobilizes considerable new investment to achieve the SDGs, convening over 300 Chief Executives, Heads of State, UN and civil society leaders. The Forum focused on the theme: Financing the 2030 Agenda: Unlocking Prosperity, and was addressed by UN Secretary General António Guterres and Al Gore, among others.

Besides its green bond announcement at the Forum, Folksam, a customer-owned company offering insurance policies and pension investments to almost one in two Swedes and one of the largest asset managers in Sweden, also committed to working with the UN Global Compact and GRI on the Reporting on the SDGs Action Platform. Some 25 announcements were made from corporate participants, including from Alecta, another considerable player in Swedish insurance.

Acquired just last week, Folksam has now exceeded its initial target of SEK 12bn with the IFC green bond acquisition, having invested almost SEK 15bn in green bonds since 2016. It is now readjusting its objective to SEK 25bn in green investments by 2018.

“I am very pleased with our close cooperation with the various bodies of the World Bank,” Folksam Group President and CEO Jens Henriksson said of the acquisition in a press release last week. “To our customers, our extensive involvement in green bonds means safe returns, while their money contributes to environment- and climate-friendly projects.”

The IFC, one of the World Bank’s five bodies, is the largest global development institution focused on the private sector in emerging markets in the world, working with over 2,000 business worldwide to create markets and opportunities. For instance, IFC delivered USD19.3bn in long-term financing for developing countries this financial year, providing loans to projects to promote development and construction, such as solar plant expansions in India and hydropower projects in Costa Rica.

“The IFC is extremely pleased to collaborate with Folksam on this significant green bond transaction. We applaud Folksam’s decision to incorporate climate considerations into their investment decision making and align with the World Bank Group’s ambitious climate strategies,” IFC Head of Funding Ben Powell said.

This is the second time Folksam acquires green bonds of a corresponding size from a World Bank body, with shares divided between Folksam Life (USD 159mn), Folksam General (USD 46mn) and KPA Pension (USD 145mn).

“The Folksam Group today is one of the largest acquirers of green bonds in the world. Our SEK 15bn add up to almost four per cent of our total AUM. Our investments in green bonds are important in our efforts to promote sustainable development and to live according to Folksam’s vision,” Henriksson added.

Image: (c) J.Lekavicius-shutterstock





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