Barclays has teamed up with index provider MSCI to launch a Green Bond Index in response to ‘high demand’ from institutional investors.
Barclays will launch the index this summer following a consultation period for investors, which closes at the end of July and will help formulate a benchmark index methodology based on how “the market identifies, evaluates and classifies green bonds”.
“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.
Remy Briand, Managing Director and Head of ESG research at MSCI, 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.”
The Green Bond Index will be available for institutional clients to license for their index-linked investment products, such as Exchange Traded Funds, separately managed accounts, and structured products, and may serve as a benchmark for dedicated green bond funds as well as informational measures of green bond risks and return.
Jim Glascott, Global Head of Debt Capital Markets at Barclays, said: “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 standardisation of the green bond market.”
The index will extend the partnership’s existing environmental, social and governance (ESG) fixed income benchmark index family, which it launched last summer.
“The green bond market has just started to develop and we are expecting the number of components in the Index to keep growing as there is an increasing interest and demand from the market for this type of product.”
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