Canada Pension Plan Investment Board (CPPIB), which seeks to grow its investments in green assets, has issued its first euro-denominated green bond.
CPPIB is selling €1bn in 10-year fixed-rate notes to enable it to invest further in eligible assets such as renewables, water and real estate projects, as well as diversify the fund’s investor base.
In June last year, CPPIB, which manages the C$368.3bn (€243.5bn) funds of the Canada Pension Plan (CPP), became the first pension fund to raise capital via green bonds as investors bought $1.5bn of the Canadian dollar-denominated 10-year bond.
Poul Winslow, a senior managing director at CPPIB and global head of capital markets and factor investing, said: “The European market for green bonds is robust and gaining even more traction amid changes such as the EU’s increased targets for how much of the region’s consumed energy comes from renewable sources.
“The capital raised will help finance our expanding portfolio of eligible green assets and demonstrate how we integrate environmental considerations into our investment decisions.”
Green bonds were introduced in 2007. According to the Climate Bonds Initiative, the annual issuance reached a new global record in 2017 as it rose 78% to US$155bn (€135.5bn) from 2016’s adjusted figure of U$87.2bn.
Climate Bonds Initiative expects annual issuance to reach US$250-$300bn in 2018, and increase to $1trn by 2020.
