Equity-linked green bond to deliver unique Australian Climate Transition Index
Focusing on decarbonisation across listed Australian companies
A series of equity-linked green bonds issued by BNP Paribas is linked to the new Australian Climate Transition Index, the first Australian equities index to have a specific forward-looking focus on the climate transition and decarbonisation.
Australian Climate Transition Index
The Australian Climate Transition Index provides a shared framework to support equity investment decisions, an approach already well established in debt markets. Over time, we expect the ACT Index to secure increased investor interest, complemented by greater participation by ASX 300 companies. This can send a clear signal to the market that there is an emerging pool of capital dedicated to companies that are either supporting the climate transition, or well equipped to adapt to the transition.Rory LonerganExecutive Director, CEFC
The BNP Paribas green bonds, totalling $140 million, included a $60 million cornerstone investment from the CEFC, alongside investments from First State Super and QBE Insurance.
The Australian Climate Transition (ACT) Index will identify some 100 Australian companies from within the ASX 300 which are likely to perform well in a world undergoing a 2°C transition.
It will use a methodology developed through a two-year collaboration between BNP Paribas, ClimateWorks Australia, sustainability analysts ISS-ESG and the Monash University Centre for Quantitative Finance and Investment Strategies.
With the companies on the ASX 300 responsible for an estimated 40 per cent of national emissions, there is clear potential for them to make a substantial contribution to improving Australia’s emissions profile.
As the first forward-looking index in the Australian market, the ACT Index gives investors the capacity to analyse the climate risk profile of their ASX portfolios. At the same time, it gives emissions-focused ASX 300 companies a powerful incentive to accelerate their decarbonisation efforts.
Initial investment in the ACT Index is open to institutional investors, via the BNP Paribas equity-linked bonds. As the ACT Index evolves, direct investment in equities products based on the ACT Index may be developed, with potential availability to retail investors.