Within the past five years, the global annual issuance of green bonds had a sixteen-fold increase, reaching a staggering USD 170 billion in 2018. The growth trajectory in Asia has outstripped other regions, with the total amount outstanding of Asia-Pacific green, social, and sustainability bond issuance reaching more than USD 35 billion in the first three quarters of 2019. To aid this development further, Carbon Care Asia (CCA) has partnered with Solactive to launch the Solactive CarbonCare Asia Sustainability Bond Index, the first index of its kind to measure the growth of green, social, and sustainability bonds in the region.
The Solactive CarbonCare Asia Sustainability Bond Index is a rules-based index. Bonds that are issued to contribute to environmental sustainability and to address social challenges leading to a positive impact in the region are eligible for inclusion in the index. The eligible bonds are required to pass a two-layered screening by CCA in order to be included in the index. The screening is intended to examine the transparency standards of the bond issuers and that the proceeds from the bond issuance are designated for projects that have significant positive outcomes. This screening by CCA is in line with international best practices under its proprietary Green and Social Taxonomy.
“This index is a long-awaited initiative to address the trust gap and to enable investors to track the performance of Asia-Pacific bonds that can demonstrate high integrity and transparency in environmental and social contributions.” says Albert Lai, CEO of Carbon Care Asia. “As a mission-driven consultancy, the launch of this index is another step, in pursuit of CCA’s mission to promote sustainability practices and to accelerate the transition to a net-zero carbon economy.”
As of 5th December 2019, the index had more than 80 bonds, with a weighted average yield to maturity of 2% and duration of four years. The index is quoted in USD and calculated as a total return index.
Steffen Scheuble, CEO of Solactive comments: “We are excited to participate in the growth story of the green, social, and sustainability bonds in the Asia-Pacific region. We hope that this index will be a valuable tool for asset owners in managing their ESG mandates and that it will serve as a reference for the wider investment community. With CCA, we are pleased to have collaborated closely and look forward to providing more innovative and ESG indices to the market.”
“A green index will be instrumental to the development of green finance. I am very proud that a Hong Kong and Singapore-based institution is involved in this pioneering work.” adds Water Cheung, Chairman of Carbon Care Asia.
Solactive CarbonCare Asia Sustainability Bond Index:
(From left) Mr Utkarsh Agrawal and Mr Jason Zeall, Vice Presidents of Solactive APAC Ltd of Solactive AG, a German index provider, Ir Albert Lai, CEO of Carbon Care Asia, and Ms Xing Lan, Associate Director (Sustainable Finance) of Carbon Care Asia announced the launch of Solactive CarbonCare Asia Sustainability Bond Index, the first index of its kind co-developed by the two companies.
Introducing the Solactive CarbonCare Asia Sustainability Bond Index
Solactive AG is an innovative index provider that focuses on the development, calculation and distribution of tailor-made indices across all asset classes. As at January 2019, Solactive AG served approximately 400 clients in Europe, America and Asia, with approximately USD 200 billion invested in products linked to indices calculated by the company globally, primarily via 380 exchange-traded funds from a number of well-known providers. Solactive AG was established in 2007 and is headquartered in Frankfurt.
Operating from Hong Kong and Singapore, Carbon Care Asia is a mission-driven consultancy in corporate sustainability, carbon strategy, climate competence and sustainable finance. CCA offers integrated solutions to manage risks and capture business opportunities whilst tackling sustainability challenges and responding to the climate emergency. Since its establishment in 2008, CCA has served over 200 Asian companies in pursuit of its mission to accelerate the transition to a net-zero carbon economy benefitting all.
The information in this document does not constitute tax, legal or investment advice and is not intended as a recommendation for buying or selling securities. Solactive AG and all other companies mentioned in this document are not responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission.