The Bank for International Settlements (BIS) has launched a fund for central bank investment in green bonds, in an attempt to meet increasing demand for climate-conscious investments from the institutions.
The open-ended fund will be supported by an advisory committee drawn from central banks across the world, and aims to promote green finance through its investments and support “best market practices” within the green bond sector.
BIS – often described as the central banks’ bank – said the fund will be denominated in US dollars, and managed in-house by BIS Asset Management.
Peter Zollner, Head of BIS’s banking department, said harnessing the collective power of central banks could help promote green investment standards.
“We are confident that, by aggregating the investment power of central banks, we can influence the behaviour of market participants and have some impact on how green investment standards develop,” Zollner said.
Bonds have to have a minimum rating of A- and comply with either the International Capital Market Association’s Green Bond Principles or the Climate Bonds Initiative’s standards to be eligible, BIS said.
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