Singapore bank UOB has adopted the Bloomberg Barclays MSCI Global Green Bond Index as part of its move to integrate environmental, social and governance (ESG) considerations into its suite of investment solutions.
The Bloomberg Barclays MSCI Global Green Bond Index, launched in 2014, is part of a family of green bond indices in the Bloomberg Barclays MSCI ESG Fixed Income benchmark offering.
Fixed-income securities are independently evaluated by MSCI ESG Research along four dimensions to determine whether a security should be classified as a green bond. These eligibility criteria reflect themes articulated in the Green Bond Principles and require clarity about a bond’s use of proceeds; process for green project evaluation and selection; process for management of proceeds; and commitment to ongoing reporting of the environmental performance of the use of proceeds.
“The Bloomberg Barclays MSCI Global Green Bond Index provides transparency to the growing green bond market, which recently crossed the US$1 trillion mark in total issuance, giving investors a way to evaluate performance and assess risk of projects with direct environmental benefits,” says Ji Zhuang, APAC head of indices at Bloomberg.
According to Bloomberg data, global green bond issuance this year (as at Nov 17 2020) has climbed to more than US$270 billion, surpassing last year’s total to hit a record. That comes as more companies and governments are turning to green securities for the first time to fund projects for cleaner growth. The market will get a further boost next year from the European Union, which will become the world’s largest issuer when it starts to sell 225 billion euros (US$268 billion) of green bonds as part of its pandemic recovery fund.
Jacquelyn Tan, head of group personal financial services at UOB, notes: “We are seeing growing customer interest in sustainable investments, including in green bonds. The Bloomberg Barclays MSCI Global Green Bond index is a globally recognized standard and adds to the accountability of the ESG solutions we offer to our customers.
“Adopting the standard as our benchmark is also in line with UOB’s risk-first wealth advisory approach to helping our customers understand the risks of investments, ahead of any potential returns. We will continue to steer our customers’ wealth to sustainable investments as we forge a sustainable future together.”