Investors who want fixed income returns, while investing in climate change solutions, can now invest in State Street Global Advisors' High Quality Green Bonds.
Green bonds fund environmentally beneficial projects and are issued primarily by the World Bank, European Investment Bank, and other supranational and multilateral development banks.
They finance mitigation or adaptation projects related to climate change, including renewable energy installations, new technologies that reduce greenhouse gas emissions, reforestation, watershed management and flood protection.
"With the immense amounts of financing needed for countries to support their climate mitigation and adaptation activities, initiatives like green bonds that help raise funds from the private sector and increase awareness for these challenges are vital," says Andrew Steer, Special Envoy for Climate Change, World Bank.
In the past two years, the nascent green bond market from these issuers has grown from $1 billion to $5 billion outstanding. The total green bond market is estimated at $12 billion.
In 2008, the World Bank launched the "Strategic Framework for Development and Climate Change" to help stimulate and coordinate public and private sector activity to combat climate change. Since then, it's issued over $2 billion in Green Bonds.
These green bonds have similar financial features to standard bonds issued by these supranational and multilateral organizations. They are rated highly and come from reputable issuers that are backed by large balance sheets and known institutions.
State Street Advisors is one of the world's largest fixed income managers with $306 billion in assets, including $122 billion in ESG assets.