New sustainability-linked bond offering to be launched by Border to Coast
Leeds-based LGPS pool, Border to Coast, is set to launch a new sustainability-linked bond fund next year, aiming to provide its partner local government pension funds with access to a range of green, social, and sustainability (GSS) bonds. With a £55bn pool of assets under management, the fund will be part of Border to Coast's ongoing commitment to incorporate environmental, social, and governance (ESG) factors within its investments.
The new fund will target GSS bonds, connecting investor capital directly to projects or issuers with specified sustainability objectives. This move is part of a growing trend towards nature-positive investment and aligning financial flows with sustainability goals, such as climate resilience and biodiversity.
The sustainability-linked debt market, which includes diverse instruments where bond terms are linked to sustainability performance targets, is expanding globally. Frameworks like the UN Global Compact’s Ocean Investment Protocol highlight the growing focus on directing finance towards sustainable development objectives.
The new fund's management will assess the credibility of issuer-level sustainability disclosures, but the specific criteria for selecting third-party verification providers have not been disclosed. The hired manager will also be responsible for developing Border to Coast's approach to incorporating responsible investment across its fixed income offering.
Currently, Border to Coast offers three fixed income funds, allocated to Sterling-denominated Index-Linked Bonds, Investment-Grade Credit, and Multi-asset Credit. It remains unclear whether the new fund will be added to the existing fixed income offerings.
Europe is on track to be the largest green bond issuer globally, with the market for sustainability-linked debt showing signs of picking up again after a slight decrease since its peak in 2021. The issuance of sustainability-linked debt has primarily been dominated by European issuers, with over $1 trillion in such debt having been issued to date.
Border to Coast's new sustainability-linked bond fund will enter a growing market driven by international sustainability agendas, further enhancing access to sustainability-linked debt for its partner funds.
The Border to Coast fund, with a focus on finance and business, is set to debut a new sustainability-linked bond fund next year, catering to its local government pension funds by offering access to green, social, and sustainability bonds. This move aligns with the growing trend in the business world to promote nature-positive investment and to direct financial flows towards sustainable development objectives.
In the expanding global sustainability-linked debt market, the new fund will target projects or issuers with specified sustainability objectives, further contributing to the global effort to meet climate resilience and biodiversity goals, as highlighted by frameworks like the UN Global Compact’s Ocean Investment Protocol.
