NNIP measures carbon saving from green bonds

The company's green bond fund invests in assets that will have a clear positive impact on the environment

NN Investment Partners has announced its EUR 1.03bn Green Bond fund is saving over half a million tonnes of CO2 annually.

The fund, which surpassed the EUR 1bn assets under management milestone in July – just three years after its launch – is saving 547,505 tonnes of CO2 a year, according to the Netherlands-based asset manager.

For every EUR 1m invested, the CO2 emissions of 534 tonnes saved by the fund are equivalent to the average annual emissions of 214 passenger cars, the company said. For the portfolio as a whole, the renewable energy capacity added is equal to that generated by 113 wind turbines.

The Green Bond fund employs an impact investing strategy, investing only in bonds that combine attractive financial returns with a clear and measurable positive environmental impact.

In addition to the environmental impact, the bond has achieved an annualised outperformance of 0.63 per cent against the benchmark (4.25 per cent versus 3.62 per cent for the benchmark, as at end-July 2019).

The growth of the fund was supported by improved liquidity in the green bond market, which was spurred by issuers raising almost as much debt in the first half of 2019 as all of 2018. This brought the global green bond market to EUR 440bn, up from EUR 335bn a year ago, according to NNIP.

Bram Bos, lead portfolio manager of green bonds at NNIP, said the green bond market’s expanding issuer base, in both geographic and sector terms, has helped the asset class establish itself as a viable choice for fixed income investors wishing to make a positive impact.

“Since inception of the fund in 2016, we have been focusing on ‘dark green’ bonds, which we believe are the primary choice for investors willing to prioritise sustainability in fixed income.

“Allocation to this asset class enables investors to reduce the carbon footprint of their fixed income portfolios and provides protection against climate risk without sacrificing liquidity and returns. In addition, we observe that these bonds offer better governance and greater transparency due to a higher level of engagement with issuers and stricter reporting requirements,” Bos said.