Stockholm (NordSIP) – According to Schroders research, the consequences of climate change are particularly acutely felt emerging markets (EMs) according to a 2016 Moody’s study. Due to agriculture’s large share of total GDP in EMs, as many as 8 times more people are affected by global warming, which cost five times more as a share of GDP in EMs than it does in developed countries. To meet this challenge, Schroders and BlueOrchard expect the global issuance of green bonds to double from US$1 trillion in 2020 to $2 trillion by 2023.
In response, Schroders partnered with BlueOrchard, the emerging markets impact specialist member of the Schroders Group, to launch a climate impact strategy targeting positive environmental change in emerging markets. The Schroder ISF BlueOrchard Emerging Markets Climate Bond fund, a UCITs strategy offering daily liquidity, will invest in mainly emerging markets green bonds and support the UN Sustainable Development Goals (SDGs) related to climate change. The fund invests in sustainability and sustainability-linked bonds that finance projects with clear environmental, green or social benefits such as renewable energy, energy efficiency, green buildings and clean transportation.
The fund will benefit from BlueOrchard’s independently verified2 impact management and ESG investment process by which BlueOrchard monitors, measures and implements impact goals and ESG risk factors while maximising positive impact. This process is supported by a dedicated team of impact management experts.
“Delivering green finance for emerging markets is key to building a low carbon world of the future. Green bonds represent a powerful opportunity to pursue positive environmental change, while also earning attractive fixed income returns,” says Michael Wehrle, Head of Investment Solutions at BlueOrchard. “Investing in these growing opportunities will not only mean investors are contributing to a lasting positive impact to climate change mitigation in markets with the fastest growth, but are also delivering robust performance for their portfolios.”
“Climate change is one of the key global threats, with Schroders Climate Progress Dashboard indicating that global temperatures are still on course to rise by 3.6°C. As investors, we can create change in the world by the way we direct capital, putting it into areas that can generate positive impacts,” Carolina Minio Paluello, Global Head of Product, Solutions & Quant at Schroders added. “This new fund will enable us to leverage our expertise and knowledge within public and private markets to maximise our investment impact across emerging and frontier markets to best meet the investment objectives of our clients.”