World Bank and GPIF partner to boost sustainability via bond markets

By Sarah Lizee

Olympia, Wash., Oct. 12 – The World Bank group and Japan’s Government Pension Investment Fund (GPIF) entered a partnership that aims to expand markets for sustainable investing, according to a Wednesday press release.

Under the partnership, World Bank and GPIF will collaborate on initiatives that promote strategies for including environmental, social and governance criteria in investment decisions across different asset classes to direct more capital towards sustainable investments.

World Bank and GPIF said in the release that investors are increasingly looking for opportunities to have a positive impact, but data and standards for incorporating environmental, social and governance considerations vary across asset classes.

For example, the link between investment performance and sustainability considerations is better understood for equity than for fixed-income markets.

World Bank and GPIF said they will develop a joint research program that will explore practical solutions for integrating sustainability considerations into fixed-income portfolios.

Potential areas of research include benchmarks, guidelines, rating methodologies, disclosure frameworks, reporting templates and risk correlation for incorporating environmental, social, and governance considerations into fixed-income portfolios, including for sovereigns and sustainable bond markets.

“We can’t achieve the sustainable development goals and meet the world’s rising aspirations without a much bigger contribution from the private sector. Our experience has shown that good environmental, social, and governance standards translate into good investments,” World Bank president Jim Yong Kim said in the release.

“And there’s never been a better opportunity to do this: there’s more than $40 trillion on the sidelines, where investors are looking for better returns. The GPIF is one of the world leaders in sustainable investing, and together we can help make the global market system work for everyone.”

The World Bank group is based in Washington, D.C. and provides funding and development expertise for developing countries. GPIF manages and invests the reserve fund of the public pension system in Japan.

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