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BNPP AM launches Parvest Green Bond

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BNP Paribas Asset Management
 

Fund helps with funding for climate change mitigation

BNP Paribas Asset Management has launched Parvest Green Bond, which invests in green bonds, a category of fixed income used to finance projects designed to mitigate or address climate change issues. Green bonds have enjoyed tremendous investor appetite that has led the market to grow 25-fold over the last five years1.

The size of the green bond market – almost USD 258 billion2 – allows the fund managers to build a well-diversified investment portfolio including bonds from government, agency and corporate issuers for investors interested in spreading out the investment risk of their portfolios and ready to accept low to medium market risk.

All issuers must respect sustainable development criteria covering social responsibility, environmental responsibility and corporate governance (ESG criteria).

Given that between now and 2030, USD 4 trillion a year is estimated to be required to support the energy transition towards a low-carbon economy, we regard green bonds as a promising vehicle to tap global capital markets for the necessary financing.

A GREEN BOND IN MORE DETAIL 

Green bonds are like ordinary fixed-income bonds, offering similar returns for similar maturities compared to other bonds from the same issuer. The only difference is that the proceeds of green bonds are used for ‘green issues’, in other words, to help finance climate change projects in industries ranging from waste management to agriculture and forestry, and from construction to energy.

Importantly, to qualify as a green bond, the issuer must monitor and report on eligible ‘green investments’ and their environmental impact. Applying such stringent criteria means we can assure investors that the advantageous climate impact of the financing is real.

Source: Climate Bonds Initiative, end of June 2017

 

WHAT SETS PARVEST GREEN BOND APART

‘Screening for green’ involves a proprietary integrated engagement approach so that both fund managers and investors can be sure the green bond investments will legitimately contribute to tackling climate change. This involves two steps:

  1. our analysts meet the issuer to check the green bond’s sustainability credentials ahead of buying the bond
  2. they follow up with regular meetings to ensure the investment has the anticipated positive impact on the environment.

MANAGED BY A SPECIALIST TEAM

The Parvest Green Bond team benefits from the 15-year expertise of a dedicated sustainability research team covering the issues around sustainable and responsible investing (SRI) and investments based on the application of environmental, social and governance-driven (ESG) selection criteria.

The integrated approach also involves an experienced fixed-income investment team already managing close to EUR 500 million of green bonds3. A portion of this amount is managed by the Parvest Green Bond team.

Key people responsible for this fund

  • Arnaud-Guilhem Lamy, fund manager and head of financial credit and SRI fixed income (left)
  • Felipe Gordillo, ESG senior analyst in the Sustainability Centre research team who acts as advisor on green bonds’ due diligence and defines the list of green bonds eligible for the fund

INVESTMENT UNIVERSE

A minimum of two-thirds of the total assets of the fund must be invested in global green bonds as defined by our Sustainability Centre research team.

The benchmark of the fund is the Bloomberg Barclays MSCI Global Green Bond index (euro hedged).

Details and documentation on https://www.bnpparibas-am.lu/intermediary-fund-selector/fundsheet/bo/parvest-green-bond-i-c-lu1620157534/

Also read:

Green bonds: France shows the way with a milestone issue

Green bonds: a key financing instrument for a “sub-2°C” world

  • 1. From USD 10.3 billion to USD 258 billion between 2012 and August 2017; source: BNP Paribas Sustainability Research team
  • 2. As at end-August 2017; source: BNP Paribas Sustainability Research team
  • 3. As at the end of Q2 2017

Parvest Green Bond is a sub-fund of the Parvest UCITS sicav registered under Luxembourg law. Investments in the fund are subject to market fluctuations and the risks inherent in investments in securities. The value of the investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay, the funds described being at risk of capital loss.

 

BNP Paribas Asset Management France, “the investment management company,” is a simplified joint stock company with its registered office at 1 boulevard Haussmann 75009 Paris, France, RCS Paris 319 378 832, registered with the “Autorité des marchés financiers” under number GP 96002.

This material is issued and has been prepared by the investment management company.

This material is produced for information purposes only and does not constitute: an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or investment advice.

This material makes reference to certain financial instruments authorised and regulated in their jurisdiction(s) of incorporation.

No action has been taken which would permit the public offering of the financial instrument(s) in any other jurisdiction, except as indicated in the most recent prospectus and the Key Investor Information Document (KIID) of the relevant financial instrument(s) where such action would be required, in particular, in the United States, to US persons (as such term is defined in Regulation S of the United States Securities Act of 1933). Prior to any subscription in a country in which such financial instrument(s) is/are registered, investors should verify any legal constraints or restrictions there may be in connection with the subscription, purchase, possession or sale of the financial instrument(s).

Investors considering subscribing to the financial instrument(s) should read carefully the most recent prospectus and Key Investor Information Document (KIID) and consult the financial instrument(s’) most recent financial reports. These documents are available on the website.

Opinions included in this material constitute the judgement of the investment management company at the time specified and may be subject to change without notice. The investment management company is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the financial instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for an investor’s investment portfolio.

Given the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the financial instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to financial instruments may have a significant effect on the results presented in this material. Past performance is not a guide to future performance and the value of the investments in financial instrument(s) may go down as well as up. Investors may not get back the amount they originally invested.

The performance data, as applicable, reflected in this material, do not take into account the commissions, costs incurred on the issue and redemption and taxes.

All information referred to in the present document is available on www.bnpparibas-am.com

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