Sustainable finance: a challenge of today and tomorrow
Over the past years, the global investor community continued to integrate climate change-related risks into investment decision making.
Amundi has a strong history of innovation in relation to developing climate solutions, with a holistic approach.
First, stoking the demand side of green markets by launching dedicated funds. Second, supporting the supply side of these new green instruments via the definition and dissemination of best practices and standards. And third, working hand-in-hand with leading institutions, to boost the depth and breadth of these innovations. So far, Amundi achieved to build fruitful partnerships.
In 2015, Amundi launched its first green bond fund, followed in 2016 by the first pure green bond strategy. Today’s green bond offer consists of four green bond strategies with one developing the asset class in emerging markets in partnership with IFC and one developing the asset class in Europe in partnership with EIB to support the growth of alternative green credit instruments.
Amundi also worked with AIIB to develop an emerging market corporate debt strategy focused on real economy issuers of labeled and unlabeled green bonds, leveraging AIIB’s Climate Change Assessment Framework.
Additional to climate-change risks, Amundi also addressed the issue of social risks. Social risk can be associated with increasing income inequality, a hurdle for the global progress needed to address climate change. Social bonds provide benefits similar to green bonds for both issuers and investors.
For issuers, social bonds are a good opportunity to diversify their clients’ base by including buy-and-hold investors. It could also help enhancing the company’s reputation and attractiveness towards its stakeholders and eventually obtaining lower long-term financing costs and positive repercussions on share prices.
For investors, financing corporates with clear social objectives ease investment monitoring. More, the social impact is free: the risk-return profile is identical to a traditional bond from the same issuer. Lastly, the required reporting increases the transparency of the use of proceeds. Using the UN SDGs as a framework to guide impact analysis, Amundi will soon launch its first social bond fund.