Stockholm (NordSIP) – Lærernes Pension, a Danish pension and life insurance company serving municipal and private school teachers, has confirmed it was responsible for over 10% of the US$538 million in commitments made to the HSBC Real Economy Green Investment Opportunity (REGIO) GEM Bond Fund.
Thanks to the support of the World Bank’s International Finance Corporation (IFC), the REGIO fund blends public and private capital to invest in green bonds in emerging markets. The goal of the fund is to enable professional investors to align financial return objectives with an impact on the real economy while supporting the Paris Climate Agreement and the UN Sustainable Development Goals (SDGs).
HSBC Asset Management disclosed the participation of Laernes Pension when it announced the final closing of the fund a week ago. However, Lærernes Pension’s commitment was made on 6 May 2020, at the second closing of the fund. The funding took place later during the same month.
“Lærernes Pension committed US$55 million to REGIO, a fund launched by HSBC Management and IFC. The fund targets green bonds issued in emerging markets,” Morten Roed Eriksen, Head of Liquid Investments at Lærernes Pension, told NordSIP.
“Lærernes Pension pursues a climate strategy based on three pillars: Exclusions of fossil fuel-based companies with no Paris aligned transition plan, reduction of the overall portfolio’s carbon foot print and targeted green impact portfolios,” Eriksen added. “The REGIO investment fits into the last pillar as an investment targeting green projects where they will be most needed: In countries highly exposed to climate change, with large investment needs but at the same time generally with more limited access to investment capital. Also from an investment perspective, the fund is attractive with yields much higher compared to the more established green bond market in developed markets.”
“Investing in green bonds is not just about fighting climate change –it’s about paving the way for lasting, positive change,” said Stephanie von Friedeburg, IFC Senior Vice President, Operations. “The final closing of REGIO reflects IFC’s commitment to innovation, partnerships, and impact investing across emerging markets and demonstrates the continued relevance of capital markets in the transition to low-carbon economies.”
Other REGIO investors include PROPARCO, a subsidiary of Agence Française de Développement, Italy’s Cassa Depositi e Prestiti S.p.A., Aviva France, Cardif Assurance Vie and Gothaer Asset Management.