Goldman Sachs Asset Management today announced the launch of the Goldman Sachs Global Green Bond UCITS ETF, a new Article 9 fund that tracks a custom index powered by Solactive, tracking the performance of investment-grade bonds denominated in G10 currencies.
The new ETF follows several years of growth in green bond issuance, as corporate and government issuers move to finance climate transition plans and companies in hard-to-downsize sectors invest in capital-intensive projects to meet decarbonization commitments. In a recent report, Moody's Investor Service predicts that green bond issuance will grow to $580 billion by 2024.
Bram Bos, global head of green, social and impact bonds at Goldman Sachs Asset Management, said:
“The growing range of issuers includes companies and governments around the world, seeking investment to drive their plans to reduce greenhouse gas emissions and protect against physical climate risks.”
The new fund offers exposure to the Solactive Global Green Bond Select Index, developed in partnership with Goldman Sachs Asset Management's dedicated Green, Social and Impact Bond team. As part of the index methodology, the team applies its enhanced screening of sustainable investments at both the issuer and bond levels. The index seeks to include companies with lower climate risk than comparable passive benchmarks.
Eligible investments for the index include treasury, corporate, government and securitized bonds denominated in G10 currencies, with the methodology including bonds that finance activities such as low-carbon energy, sustainable water and wastewater management, green buildings, low-carbon transportation carbon, living natural resource management and land use, low carbon information and communications technology, green manufacturing and sustainable waste management.
According to Goldman Sachs, the fund aims to enable investors to replace a portion of their existing global fixed income portfolios with bonds that meet certain sustainable investment criteria, including controversy exclusions, project and sector exclusions, and an analysis of investment policies. issuers’ climate transition.
Hilary Lopez, Head of Third-Party Equity EMEA at Goldman Sachs Asset Management, said:
“The global green bond market is a growing source of opportunity for investors as they look to complement their fixed income exposure with dedicated green, social and impact bonds. We are delighted to launch this innovative product that brings our green bond team's expertise to an ETF format for the first time.
“We plan to continue expanding our product range to support our clients’ investment and sustainability goals.”
