To help lead the transition to sustainable finance, the world’s central bankers have set up their own fund for green investing.
The Bank for International Settlements (BIS) announced the launch of a new open-ended fund for central banks to invest their reserves in green bonds.
The fund, which is denominated in U.S. dollars, is managed in-house by BIS Asset Management as part of its pool for fixed income investment products.
The fund will invest in bonds have a minimum credit rating of A-, and must comply with the International Capital Market Association’s green bond principles and/or the Climate Bond Standard published by the Climate Bonds Initiative.
“Responding to a growing demand for climate-friendly investments among official institutions, the BIS’s green bond fund initiative helps central banks to incorporate environmental sustainability objectives in the management of their reserves,” the BIS said.
Additionally, it says that the initiative aims to support the growth of the green bond market, and the adoption of best practices in that market.
“We are confident that, by aggregating the investment power of central banks, we can influence the behaviour of market participants and have some impact on how green investment standards develop,” said Peter Zöllner, head of the BIS banking department.