Carbon Care Asia partners with Solactive to launch the first Asia Sustainability Bond Index
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.