Two of the world’s largest index providers – MSCI and Barclays – have teamed up to a launch a new Green Bond Index, expanding on the Environmental, Social and Governance (ESG) fixed income index family the pair unveiled in June 2013.
Barclays and MSCI have teamed up to offer an index designed to measure the performance of so-called green bonds.
The Green Bond Index is intended to track the growing market of bonds issued to fund projects with environmental benefits.
The index may serve as a benchmark for dedicated green bond funds as well as informational measures of green bond risks and return.
The index will also be available for institutional clients to license for index-linked investment products, such as exchange-traded funds (ETFs).
Brian Upbin, Head of Benchmark Index Research at Barclays, commented: “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. A Green Bond Index is a logical extension of the Barclays and MSCI fixed income index family that integrate ESG criteria in their design.”
Remy Briand, Managing Director and Head of MSCI ESG Research, 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.”
Jim Glascott, Global Head of Debt Capital Markets at Barclays, added: “According to the Climate Bond Initiative, approximately US$30-40bn of green bonds will be issued this year, increasing to around US$100bn next year. 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 standardization of the green bond market.”