Zurich plans to invest $2bn in green bonds

Zurich Insurance has doubled the amount it plans to invest in green bonds to $2 billion, in the latest sign that the fledgling market for bonds which help reduce climate change is gathering momentum.

The Swiss insurer, which has an investment portfolio of $214 billion, said the investment would be denominated in euros, pounds and Swiss francs, and allocated to the balance sheets of its European companies.

Cecilia Reyes, chief investment officer of Zurich, which is one of the biggest players in the nascent market for green bonds, said the instruments were well-matched with the insurer’s investment strategy.

Green bonds have existed for about seven years, and were pioneered by supranational organisations such as the World Bank, the European Investment Bank and the African Development Bank.

Private groups

A number of private groups, including the Anglo-Dutch consumer goods company, Unilever, and the French power companies, GDF Suez and EDF, have recently begun to issue them as well.

European issuance of green bonds has already reached $16.6bn so far this year, more than double the total for the whole of 2013. (Copyright The Financial Times Limited 2014)