Innovative new Index to track growing market of bonds issued to fund projects with environmental benefits
NEW YORK--(BUSINESS WIRE)-- Barclays, publisher of leading broad market bond benchmarks, and MSCI Inc., a leading provider of investment decision support tools worldwide, announced today an agreement to launch a new Green Bond Index, expanding on their Environmental, Social and Governance (ESG) fixed income benchmark index family launched in June 2013.
The Green Bond Index is intended to reflect the fixed income market funding projects and initiatives with direct environmental benefits. These indexes may serve as a benchmark for dedicated Green Bond funds as well as informational measures of Green Bond risks and return. The Green Bond Index will be available for institutional clients to license for their index-linked investment products, such as Exchange Traded Funds (ETFs), separately managed accounts, and structured products.
"With an increase in Green Bond issuance, we have seen demand from institutional investors for a new benchmark in this emerging and rapidly growing market,” said Brian Upbin, Head of Benchmark Index Research at Barclays. “A Green Bond Index is a logical extension of the Barclays and MSCI fixed income index family that integrate ESG criteria in their design.”
From now until July 31, 2014, MSCI and Barclays will open a formal consultation period to solicit feedback from the market. This consultation is intended to ascertain how the market identifies, evaluates, and classifies green bonds to help determine an appropriate benchmark index methodology.
Remy Briand, Managing Director and Head of MSCI ESG Research, said, “MSCI ESG Research offers institutional investors an independent and objective evaluation of Green Bond securities with an aim to meet well defined criteria for Green Bond classification.”
“According to the Climate Bond Initiative, approximately US$30-40bn of green bonds will be issued this year, increasing to around US$100bn next year,” said Jim Glascott, Global Head of Debt Capital Markets at Barclays. “The creation of a Green Bond Index will be an extremely useful tool for issuers and institutional investors and an important step in the evolution, transparency, and standardization of the Green Bond market.”
Barclays is an international financial services provider engaged in personal banking, credit cards, corporate and investment banking and wealth management with an extensive presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs approximately 140,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.com.
MSCI Inc. is a leading provider of investment decision support tools to investors globally, including asset managers, banks, hedge funds and pension funds. MSCI products and services include indexes, portfolio risk and performance analytics, and ESG data and research.
The company’s flagship product offerings are: the MSCI indexes with over USD 9 trillion estimated to be benchmarked to them on a worldwide basis1; Barra multi-asset class factor models, portfolio risk and performance analytics; RiskMetrics multi-asset class market and credit risk analytics; IPD real estate information, indexes and analytics; MSCI ESG (environmental, social and governance) Research screening, analysis and ratings; and FEA valuation models and risk management software for the energy and commodities markets. MSCI is headquartered in New York, with research and commercial offices around the world.
MSCI ESG Research products and services are designed to provide in-depth research, ratings and analysis of environmental, social and governance-related business practices to companies worldwide. Ratings and data from MSCI ESG Research are also used in the construction of the MSCI ESG Indexes. MSCI ESG Research Inc. is a Registered Investment Adviser under the Investment Advisers Act of 1940. MSCI is a signatory to the United Nations-backed Principles for Responsible Investment (PRI).
1As of March 31, 2014, as reported in June 2014, by eVestment, Lipper and Bloomberg
For further information on MSCI, please visit our web site at www.msci.com
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