Central Bank to participate in green bond investment

Regulator announces foray into more sustainable investment

The Central Bank also released new data showing participation by Irish-resident entities in Europe’s fledgeling green boon market. Photograph: iStock

The Central Bank also released new data showing participation by Irish-resident entities in Europe’s fledgeling green boon market. Photograph: iStock

 

The Central Bank of Ireland is to participate in US dollar-denominated green bond investment fund as part of a more sustainable investment policy.

The regulator did not disclose how much it plans to invest in the bond, which is being issued by the Bank for International Settlements (BIS), a financial institution which is owned by central banks and often referred to as the central banks’ bank.

“Investing in this green bond fund forms part of the Central Bank’s aim to further integrate climate change-related sustainable and responsible investment principles within its investment assets,” the regulator said.

“ The investment also aligns with the recent agreement on a common Eurosystem stance for climate change-related sustainable investments in non-monetary policy portfolios for Eurosystem central banks,” it added.

The Central Bank also released new data showing participation by Irish-resident entities in Europe’s fledgeling green boon market.

The issuance of green bonds across the euro area increased from €72 billion in 2017 – equating to 0.4 per cent per cent of total euro area debt securities – to €314 billion in 2020, equating 1.7 per cent.

Irish participation in this market, through issuance or holding, has grown in tandem, the regulator said, noting Irish-resident investment funds hold the majority of green bonds in Ireland with €12.6 billion or 74 per cent.

Credit institutions are the second largest holder, followed by insurance corporations.