Case Details

The 2015 Paris Agreement demands a dramatic global response in support of three key objectives: (1) climate change mitigation, (2) adapting to the adverse impacts of climate change and (3) aligning financial flows to make them consistent with a pathway towards low greenhouse gas emissions and climate resilient development. To achieve these objectives, Amundi, a leading European asset manager, has partnered with the Asian Infrastructure Investment Bank (AIIB) to build a simple holistic investment framework (Framework) that can be applied to a global range of issuer types and asset classes as part of the AIIB’s Asia Climate Bond Portfolio project. The project seeks to address the underdevelopment of the climate bond market in AIIB members through a managed fixed income portfolio of USD500 million. It expects to mobilise another USD500 million from climate change-focused institutional investors. The project also seeks to allocate a portion of the investment proceeds for market education, engagement and issuer support.

The case first introduces key concepts of ESG investing, followed by a discussion on the Framework, including its construction, implementation and reporting. The case then explores how three leading climate finance research organisations (Fitch Solutions, The Carbon Trust and the Climate Bonds Initiative) applied the Framework to sectors, companies and debt issuers. Limitations of the Framework and caution that should be exercised when using the Framework. The case will conclude with examples of how the Framework can be adopted by other investors.