Investor interest in green stimulus packages is growing. Earlier this week, a group of investors, supported by UKSIF and Tomorrow’s Company met for the second in a series of roundtables to explore how economic stimulus packages could be encouraged to accelerate the transition to a low carbon, resource efficient economy.
Stimulus packages need to leverage private investment into the new green economy, they said. And there is an emerging consensus that well designed “green bonds” are an important part of this. Because this investment is urgent, these bonds need financial characteristics already well understood by investors. They need to look attractive as conventional fixed income investments not as something new and different that can justify only a cautious toe in the water for the next few years.
Luckily, there is already a good example to follow in the work of the International Finance Facility for Immunisation which works with the GAVI Alliance and the World Bank. The IFFIm has created and placed institutional bonds backed by government commitments to bring forward funds for vaccination.
And, separately, the UK government has already welcomed the HSBC Vaccine Investment ISA that allows UK retail investors to join institutional investors in investing in vaccine protection at a competitive rate of return. It is open until 24 April 2009.
The challenge now is to build rapidly on this experience – developing products for pension funds, insurance companies and other institutional investors initially and perhaps also for retail investors later.
Stimulus packages need to leverage private investment into the new green economy, they said. And there is an emerging consensus that well designed “green bonds” are an important part of this. Because this investment is urgent, these bonds need financial characteristics already well understood by investors. They need to look attractive as conventional fixed income investments not as something new and different that can justify only a cautious toe in the water for the next few years.
Luckily, there is already a good example to follow in the work of the International Finance Facility for Immunisation which works with the GAVI Alliance and the World Bank. The IFFIm has created and placed institutional bonds backed by government commitments to bring forward funds for vaccination.
And, separately, the UK government has already welcomed the HSBC Vaccine Investment ISA that allows UK retail investors to join institutional investors in investing in vaccine protection at a competitive rate of return. It is open until 24 April 2009.
The challenge now is to build rapidly on this experience – developing products for pension funds, insurance companies and other institutional investors initially and perhaps also for retail investors later.
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