Fixed Income Investment

This collaboration aims to work towards mainstreaming low carbon investment in insurer’s fixed income portfolios.

As significant institutional investors, interest was expressed in exploring the relationship between the regulatory environment in which insurers invest and their ability to engage in new investment opportunities for national and international climate financing.

Members agreed there was value in an explicit focus on fixed income assets due to the importance of these assets to insurers with long term liabilities and the relative lack of attention that this asset class has received so far (compared to equities and property) in the context of the risks and opportunities of climate change. Less than 0.1% of fixed income investment is positively identified by issuers or market observers as contributing to low carbon growth.

On 5th December 2011, to coincide with the Fifth Global Business Day at the climate negotiations in Durban, institutional investors Allianz, Aviva, Legal and General and Swiss Re, with Investment and Pension Advisors Aon Hewitt put out a statement articulating a collective demand to influence product offerings and avoid unintended consequences of financial regulation. The insurers want to draw attention to the gap between the low carbon investment needed and the fixed income carbon investments available and suggest solutions to address this.

Click here to access Investment Statement

Click here to access press release

2012

On the basis of the work done by members last year to increase opportunities to make low carbon fixed income investments, while also pointing to the risks of unintended consequences of financial regulation preventing insurers playing a meaningful role, ClimateWise is supporting the Environmental Bonds 2012 conference: Capital markets and the green economy.

Read about the conference on the Environmental Finance website here