Japanese Life Insurance Companies Purchased World Bank Sustainable Development Bond to Support Holistic Approach to Climate Action | WPN World People News

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) on April 26, issued an 8-year AUD 516 million Sustainable Development Bond due April 26, 2030.

A group of Japanese life insurance companies invested in the bond to support the World Bank’s integrated approach to mainstreaming climate change mitigation and adaptation efforts into its lending. As the largest multilateral financier of climate action in developing countries, the World Bank works to incorporate climate activities into all its operations, including investments in social sectors such as education and health. In the last fiscal year all IBRD projects were screened for climate risk and over 95 percent incorporated dedicated climate components. This includes projects across sectors and regions, not only sectors typically associated with climate investments. For example, projects in education ensure that new school buildings are built to be community shelters from natural hazards and in the health sector, projects are designed to improve the energy efficiency in hospitals and health clinics. While in agriculture sector projects were designed to promote climate-smart agriculture and to reduce the loss and waste of food.

This transaction built on IBRD’s September 2021 Green Bond issuance, by also bringing together Japanese life insurance companies to invest in bonds that demonstrate their collective support for the urgency of climate action. Through their first-of-its kind Sustainable Development Bond purchase, these companies signal their support for the World Bank’s priority to ensure that climate actions are integrated into all new investments. Listed alphabetically, Asahi Mutual Life Insurance Company, The Dai-ichi Life Insurance Company, Limited, Fukoku Mutual Life Insurance Company, Meiji Yasuda Life Insurance Company and Sumitomo Life Insurance Company.

Citigroup Global Markets Limited acted as the underwriter of this transaction (Citigroup Global Markets Japan Inc. is the bond arranger).

Jorge Familiar, Vice President and Treasurer, World Bank, said, “Investors have been increasingly integrating Environmental, Social and Governance criteria in all their investment decisions. They are looking for products that take a holistic approach to tackling climate change and social challenges to support a more sustainable future. We are grateful to Japanese life insurance companies for coming together to show their support the World Bank’s efforts to mainstream climate action in developing countries and thank them for their investment.”

Takahiro Ono, Executive Officer, Asahi Mutual Life Insurance Company, said, “As a responsible institutional investor, Asahi Mutual Life Insurance aims to contribute to solutions to global social issues such as environmental problems in line with global efforts to achieve a sustainable society. We invested in this bond in support of the World Bank’s holistic approach to climate action. We put ‘Co-existence with society through continued engagement to create a prosperous society’ as one of our prioritized actions for sustainable management based on our basic management philosophy ‘Sincere Service’. We will continue to ESG investment actively to contribute to building a sustainable society.”

Kazuyuki Shigemoto, Managing Executive Officer, Chief General Manager, Investment, The Dai-ichi Life Insurance Company, said, “Dai-ichi Life, as a ‘universal owner’ that manages assets received from customers, has been promoting ESG investments. In particular, we regard climate change as the most important issues in responsible investment. This investment extends support not only for existing green projects, but also for strengthening climate change measures in a wider range of projects, and is expected to help create a society that is highly adapted to climate change. As a responsible institutional investor, the Company will continue to actively engage in ESG investment to contribute to realizing a sustainable society as well as to improve its investment return through sophisticated and diverse investment methods.”

Takehiko Watabe, Director and Managing Executive Officer, Fukoku Mutual Life Insurance Company, said, “Fukoku Life is actively engaged in ESG investments under our business policy of ‘contributing to the realization of a sustainable society as a mutual life insurance company.’ We are very pleased to support the World Bank’s commitment to support the further expansion of climate change action in developing countries and we believe this investment helps us achieve not only a financial benefit, but also contribute positively to society in line with our company philosophy. Fukoku Life will continue to strive to be an organization that promotes true mutual aid based on the concept of THE MUTUAL."

Masao Aratani, Director, Deputy President Executive Officer, the Investment Division, Meiji Yasuda Life Insurance Company, said, “Taking the pressing need for measures to counter climate change around the world into consideration, we have positioned ‘Protect the environment and combat climate change’ as a priority issue requiring further initiative. In line with this positioning, efforts are now under way to step up our relevant initiatives. We decided to invest in this bond in support of the World Bank's efforts to increase climate finance in developing countries. We, as a responsible institutional investor, perform asset management that contributes to the creation of a sustainable society in order to fulfill our social responsibility and public mission as a life insurer while securing stable profit, in line with our management philosophy, Peace of Mind, Forever.”

Iwao Matsumoto, Managing Executive Officer, Sumitomo Life Insurance Company, said, “Climate change is an important issue that should be addressed across national borders. We endorse the World’s Bank’s commitment to support developing countries and have invested in their green bonds and Sustainable Development Bonds for this purpose. We welcome that this investment will boost the decarbonization and environmentally friendly projects in developing countries. Through responsible investment, Sumitomo Life will continue to contribute to the realization of a sustainable society and improve investment returns.”

Philip Brown, Head of Sustainable & Public Sector DCM, Citi, said, “Citi is proud to have worked on this transaction with World Bank and a select group of Japan’s leading insurance companies on IBRD's Sustainable Development Bonds for Climate Action. Climate change remains the biggest challenge of our times and the World Bank's continuous efforts in this field are strongly supported and aligned with Citi’s objectives and those of our clients.”

Through the issuance of Sustainable Development Bond, the World Bank has been engaging with investors to explain how its bonds support the financing of projects that contribute to climate action and how the World Bank’s updated Climate Change Action Plan helps countries integrate climate change into their development strategies and apply climate financing in ways that achieve the most positive impact. Applying a “whole of economy” approach with developing country clients helps the World Bank mainstream climate considerations across its portfolio, including in high emitting sectors as well as sectors not typically associated with climate action such as health, education, and agriculture.

Source: World Bank