As an example, in late April the World Bank (International Bank for Reconstruction and Development) issued NZ$1 billion of New Zealand dollar-denominated bonds to institutional investors. The issuance, for which ANZ was one of the Lead Managers, will help the bank’s sustainable development mission to end extreme poverty and boost prosperity internationally.
Closer to home, Kāinga Ora returned to the market and issued NZ$600 million of 7.5-year wellbeing bonds to fund social housing initiatives in New Zealand. ANZ acted as joint lead manager for this transaction. Kāinga Ora is the largest New Zealand issuer of sustainability bonds.
This month, the Asian Development Bank issued a New Zealand Dollar gender bond. The NZ$375 million, 10-year bond, jointly lead by ANZ, will be targeted to finance projects in the region that promote gender equality and women’s empowerment.
Affordable child and family support, education, improving participation in decision making and leadership and improving the resilience of women against risks and shocks from climate change and disaster, are all within the scope of the financing programme.
Several factors are driving the rise in sustainable finance and offering opportunities to explore new ways of bringing issuers and investors together.
A major factor is that investors increasingly want to see their money put into investments that not only offer a good return, but also support sustainable initiatives and responsible investment.
Environmental concerns have risen for many investors in recent years as the world steps up its transition to a low-carbon economy.
The New Zealand Government has introduced legislation that will require financial service providers to report the impact of climate change on their businesses.
The aim of the legislation is to ensure climate change is central to the companies’ decision making, but it also means large organisations will have data they can then use to support their sustainable financing initiatives.
There are other initiatives like the Climate Change Commission’s report, the New Zealand Sustainable Finance Forum and the Climate Change Response (Zero Carbon) Act. Collectively, these initiatives have driven engagement from companies in terms of what it means for them and how they will comply.