The euro-denominated, open-ended green bond fund for central banks builds on the success of the first, US dollar-denominated green bond fund
- The two funds belong to the BIS's green bond fund initiative and
invest in high-quality bonds that comply with international green
standards and finance environmentally friendly projects
- The BIS and participating central banks are strongly committed to supporting environmentally responsible investment practices
The Bank for International Settlements (BIS) has launched a
euro-denominated, open-ended fund for green bond investments by central
banks and official institutions. The launch follows the successful
introduction of a first BIS green bond fund denominated
in US dollars in September 2019. Together, the two BIS green bond funds
will manage some $2 billion in green bonds for central banks with the
expectation that the funds will continue to grow considerably.
The funds have been developed with the support of an advisory
committee drawn from a global group of central banks. They are part of
the BIS's green bond fund initiative, which helps central banks to
incorporate environmental sustainability objectives in the management of
their reserves and capital, in line with a growing demand for
climate-friendly investments among official institutions.
The funds promote green finance through sizeable investments in
environmentally friendly projects such as renewable energy production
and energy efficiency, and support the adoption of best market practices
and reporting standards to deepen the green bond market.
The two funds are structured according to Swiss law and belong to the
BIS Investment Pool (BISIP) family, a format commonly used by BIS Asset
Management for its fixed income investment products. They are managed
in-house by BIS Asset Management. Eligible bonds have a minimum rating
of A– and comply with the International Capital Market Association's
Green Bond Principles and/or the Climate Bond Standard published by the
Climate Bonds Initiative. Furthermore, the BIS produces a dedicated
yearly impact report for investors based on the information provided by
the issuers of the bonds in which the funds invest.
The BIS is committed to supporting environmentally responsible
finance and investment practices, in line with its participation in the
Central Banks and Supervisors Network for Greening the Financial System.
Commenting on the launch, Peter Zöllner, Head of the BIS Banking
Department, said: "Central banks around the globe have continued to
support this joint green bond fund initiative and channel funds into the
green bond market through the BIS. In line with the initiative's
objectives, we are continuing our dialogue with green bond issuers and
remain committed to supporting the adoption of best market practices,
including improved impact reporting, to deepen the green bond market."
BIS
© BIS - Bank for International Settlements
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