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Financial services firm BNP Paribas in collaboration with the World Bank has launched the first equity index—linked green bond that will help raise funds for products seeking to mitigate climate change.
The 30 stock equity index to which the ‘World Bank Green Bond’ is linked, comprises of companies selected on the basis of their corporate sustainability ratings. Additionally, the bond could have ‘exposure to the performance of the Ethical Europe Equity Index’
“The World Bank Green Bonds will help raise funds for projects seeking to mitigate climate change and help those affected adapt to it,” a statement by BNP Paribas said.
It added that the stocks on the index, which is based on Environmental, Social and Governance (ESG) performance, are selected from corporates analysed by Vigeo — a global ESG rating agency.
“This is the first equity index—linked World Bank Green Bond,” World Bank Global Capital Markets head Doris Herrera—Pol said.
“It is a further step in the development of the green bond market and expands the investor base to seeking to benefit from the financial performance of a sustainable equity index, while supporting climate—focused activities in World Bank member countries,” Herrera—Pol added.
BNP Paribas Cardif, an insurance division of BNP Paribas, purchased the first green bond — a Euro 50 million note with a 10-year maturity — issued by the World Bank.
BNP Paribas Corporate and Investment Banking’s Structured Equity global head Renaud Meary said: “This investment solution is a landmark step in what is set to become a rapidly growing sustainable and responsible investment market.
“This combines BNP Paribas traditional strengths in structured products, debt capital markets and sustainable finance”.
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