BIS launched an open-ended fund for central bank investments in green bonds. The is denominated in US dollars, is structured according to Swiss law, belongs to the BIS Investment Pool (BISIP) family, and is managed in-house by BIS Asset Management. Meanwhile, RBNZ has affirmed its Climate Change Strategy through the investment of USD 100 million in green bonds. The climate change strategy of RBNZ focuses on the channels through which it can contribute to efforts to mitigate the effects of climate change. These include managing its own direct impact on the climate, reflecting climate risks in its core functions, and contributing to wider efforts to identify, monitor, and manage climate risks domestically and as part of the global regulatory community.
The BIS fund is a response to growing demand for climate-friendly investments among official institutions. The green bond fund initiative is intended to help central banks to incorporate environmental sustainability objectives in the management of their reserves. With the support of an advisory committee drawn from a global group of central banks, the fund pools BIS client assets to promote green finance through sizable climate-friendly investments and support the adoption of best market practices to deepen the green bond market. Eligible bonds have a minimum rating of A- and comply with the International Capital Market Association's Green Bond Principles and/or the Climate Bond Standard published by the Climate Bonds Initiative. The initiative is part of the broader commitment of BIS to supporting environmentally responsible finance and investment practices, in line with the BIS participation in the Central Banks and Supervisors' Network for Greening the Financial System (NGFS). Recently, BIS also published an article in the Quarterly Review that explores how environmental sustainability objectives might fit within central banks' reserve management frameworks.
Keywords: International, Asia Pacific, New Zealand, Banking, Green Bonds Fund, Climate Change Risk, ESG, RBNZ, BIS
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