How green is a green bond fund, really? Evli’s new report helps investors find out. For the first time, Evli is publishing underlying figures for its Evli Green Corporate Bond fund. The new, annual Allocation and Impact Report shows that the majority of the fund’s 2020 portfolio of investments were in renewable energy, green construction and clean transport. The report also sets out to reveal which sustainable development goals the portfolio of corporate bonds in Evli's first green bond fund contribute to.
In 2020, the Evli Green Corporate Bond fund, that is rare even on a pan-European level, was launched. Now, in the spirit of transparency and openness, we want to make the fund’s underlying facts and figures accessible for clients, in addition to revealing the investments’ concrete impacts. Transparency is at the heart of Evli’s principles of responsible investment and, for Evli, it is important to be open about the content of its investments.
“Through the new report, Evli is making the Evli Green Corporate Bond fund even more transparent for investors”, says Noora Lakkonen, Evli Bank´s Responsible Investment Analyst.
Energy, transport and construction at the fund’s core
In 2020, the majority of the investments in the Evli Green Corporate Bond portfolio were allocated to renewable energy, green construction and clean transport. The funded projects helped bond issuers, among others, to reduce carbon emissions, increase renewable energy capacity and implement green construction projects, thereby improving the energy efficiency of buildings, for example.
When examining the investments in relation to the UN’s Sustainable Development Goals, we can see that the financed projects are in line especially with the sustainable development goals regarding clean energy, the climate and sustainable cities and infrastructure. All the green corporate bonds in the portfolio also have a second party opinion, which is an external verifier’s assessment of the quality of the green bond framework from an environmental perspective and in the light of current market practices (for example, the International Capital Markets Association’s Green Bond Principles).
The new, annual Allocation and Impact Report complements the fund´s ESG report, which is published four times a year, by providing information on the use of proceeds and impacts of green corporate bonds in the fund that is more detailed than the issuer-level information provided on the regular ESG report. The information in the report has been compiled on the basis of allocation and impact reports published by the bond issuers.
Transparency in investments
Transparency is a key feature of corporate bonds issued in use of proceeds format because, unlike traditional corporate bonds, the investor can track how the funds raised through issuing bonds have been used. This is why reporting is essential for the transparency of the green bond market, as it offers investors the possibility to ensure that issuers have used the funds as promised at the time of issue within the green bond framework.
"By reporting openly on our own investments and their impacts, our goal is to offer our clients similar transparency in their investments", says Lakkonen.
Both the Evli Green Corporate Bond fund ESG report and the Allocation and Impact Report can be found at www.evli.com/esg-reports.
Noora Lakkonen, Responsible Investment Analyst, Evli Bank Plc, tel. +358 40 356 3411, email@example.com