Stockholm (NordSIP) – SPP/Storebrand, the Swedish Insurance and Pensions giant, has signed the Green Bond Principles (GBP) guidelines, a voluntary agreement recommending transparency and disclosure and promoting integrity in the development of the Green Bond market by clarifying the approach for issuance of Green Bonds.
GBP guidelines are intended for broad market use: GBP’s provide guidance on key components of issuing credible Green Bonds, aid investors by ensuring availability of information to evaluate the environmental impact of Green Bond investments, and assist underwriters by moving the market toward standard disclosures to facilitate transactions. The GBP’s have been determined by international banks and investors, where the criteria pertains to both the uses and methodology of cash flows to ensure they are steered only to predetermined projects. The impact of financed projects on the environment is subject to continuous evaluation.
The fact that SPP/Storebrand has chosen to sign the Green Bond Principles is a natural progression and points to the direction in which SPP wishes the market to evolve, says Helena Lindahl, Managing Director of SPP Grön Obligationsfond (SPP Green Bond Fund), the world’s largest green bond fund, which was incepted in 2015.
The market for green bonds has grown exponentially. Since the release of the first green bond by the World Bank in 2008, over USD270bn has been allocated to finance the transition to a more sustainable economy.
“Green bonds are an excellent financial instrument for earmarking money for climate change projects while providing equivalent returns to traditional bond investments,” Lindahl said in a press release. “Many people ask me: why should I invest in green? I’d like to reverse the question. Why not?”
The market for green bonds took off in earnest in 2012. Since then, SPP/Storebrand has invested in green bonds, establishing itself internationally as one of the largest investors in the asset class. With over SEK 3bn in AUM, SPP’s Green Bond Fund is not only the world’s largest green bond fund but has also scored the top performance in its category.
“There are no arguments left for not investing green. I think everyone should replace their ‘usual’ bonds with green ones, especially institutional investors who are often required to work towards greener social adjustments. A green bond fund should be an equally obvious element in a modern savings portfolio,” Lindahl adds.
The move to join the GBP’s adds to an already sterling record on sustainability for SPP/Storebrand, which raised SEK 10bn for its fossil-free PLUS fund concept in under a year. It recently also joined forces with Fossilfrit Sverige, a Swedish government initiative launched prior to the 2015 Paris climate summit with the objective of making Sweden completely free of fossil fuels by 2045.
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