Paris-headquartered firm BNP Paribas Asset Management has launched the Parvest Green Bond fund, investing in bonds financing project that seek to mitigate or address climate change issues.
The strategy is managed by BNPP AM’s fixed income team, with analysis provided by the firm’s sustainability research team, and currently tallies €100m of assets under management.
The Parvest Green Bond fund is benchmarked against the Bloomberg Barclays MSCI Global Green Bond Index (Euro Hedged). It invests primarily in securities with a minimum credit rating of B-. The fund has at least 83.5% of its net assets invested in green bonds, a universe of almost 150 issues forming around $115bn. Issuers are met to verify each bond’s sustainability credentials ahead of purchase, this is combined with ongoing monitoring of the environmental impact throughout the life of the bond.
The vehicle is currently registered for sale in Austria, France, Germany, Luxembourg and the United Kingdom.
BNPP AM managed some €30bn of assets in SRI strategies, including more than €500m in green bonds as at 30 June 2017. A research from the manager suggested that between today and 2030, $4trn will be required annually to financially support the energy transition towards a low-carbon economy.
Felipe Gordillo, senior ESG analyst & Arnaud-Guilhem Lamy, manager of Parvest Green Bond, commented: “Climate change is one of the greatest challenges of our time and green bonds are one of the best ways to finance activities with low greenhouse gas emissions and to support low-carbon and climate-resilient development. Meanwhile the rapid expansion of the green bond market means that it is now diversified enough to offer a genuine investment solution.
“Our SRI research expertise dating back 15 years, very well-resourced fixed income portfolio management capability and almost EUR 500 million of existing investments in green bonds makes us ideally placed to manage Parvest Green Bond. Greenhouse gas avoidance is the key climate benefit of the fund, enabling investors to offset carbon emissions in their fixed income portfolios, as well as to meet sustainable regulatory requirements.”
BNPP AM had €566bn of assets under management or advisory as of 30 June 2017.