Today we announced the launch of the GAM Sustainable Climate Bond strategy, which allocates to green and sustainability bonds with positive environmental impact, issued by the European financial sector. The strategy is the second to be launched this year, building our sustainable product range. The bond market for climate change solutions is worth more than USD 100 trillion and mobilising this capital is key to advancing the low-carbon transition.
For this reason, we have also joined the Climate Bonds Initiative, whose purpose is to drive forward this process. The launch of the sustainable climate bond strategy recognises the pivotal role banks, in particular, will play in the environmental transition as the primary source of financing for European corporates and for small and medium enterprises (SMEs).
In the first half of 2021, green bond issuance by European banks reached USD 100 billion, driven by a record USD 33 billion in the first half of 2021 alone. Issuance is expected to remain strong, driven by banks’ commitments to finance the ‘green’ economy. The sustainable climate bond strategy will be managed by our well-known Credit Opportunity team in charge of GAM Credit Opportunity Fund (Atlanticomnium), drawing upon the team’s experience and historical strong track record investing in the bonds of financials and their established history of analysing issuers, conducting close engagement and building deep relationships with issuers and regulators.
The strategy adopts an active, bottom-up, high-conviction approach, investing in bonds which allocate proceeds to eligible green projects across market caps with measurable impact, such as renewable energy and green buildings. In order to identify bonds that the investment team believes will deliver meaningful impact, the team applies its proprietary green bond assessment framework. The framework is split into three layers of analysis – issuer, bond and green asset level – which are interwoven into the team’s overarching, longstanding process. Each layer is assessed individually, using both proprietary research and data from external third parties. Engagement is also a key part of the team’s framework, both to enhance their analysis and to encourage improving standards within each pillar.
“Climate change is one of the largest and most pressing risks for the global economy and banks have a pivotal role in driving the environmental transition, by supporting both large and small companies. We believe that our expertise investing in financials and a robust bottom-up approach to green bond selection are key to generating a positive environmental impact for our investors.”Gregoire Mivelaz, fund manager at Atlanticomnium
“The launch of the Sustainable Climate Bond fund follows an incredible amount of teamwork and collaboration involving multiple departments from across GAM together with the team at Atlanticomnium. Thank you to all of those involved for your hard work and dedication in bringing this strategy to market. It is a compelling offering for our clients who want to generate both a meaningful environmental impact and attractive returns.”Stephanie Maier, Global Head of Impact and Sustainable Investment