Japanese Investors Purchase First Sustainable Development Bond Raising Awareness for World Bank Biodiversity Conservation Efforts.
The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 10-year AUD 315 million Sustainable Development Bond due September 2032. A group of Japanese investors purchased the bond to show their support for the World Bank’s approach to biodiversity and natural ecosystem services while pursuing poverty eradication and shared prosperity sustainably in client countries. Institutional investors participating in the transaction included Fukoku Mutual Life Insurance Company and Meiji Yasuda Life Insurance Company.
Jorge Familiar, Vice President and Treasurer, World Bank, said, “Investors have been increasingly integrating sustainability criteria in investment decisions, and biodiversity has become a focus. We are grateful to Japanese investors for coming together to show their support for the World Bank’s efforts to help member countries improve biodiversity and protect ecosystem services as part of their strategies for growing their economies and building resilience for the future.”
Juergen Voegele, Vice President for Sustainable Development, World Bank, said, “The rapid decline in biodiversity and ecosystem degradation has enormous development, economic, and financial costs. We cannot overstate the importance of mobilizing more funding, and particularly private finance, to reverse this loss. Instruments like Sustainable Development Bonds support the financing that helps fill the funding gap required to scale up nature-positive investments, while also paving the way for a greener financial sector that protects nature.”
Biodiversity is critical to sustainable development, climate resilience, and human well-being. Animal, plant, and marine biodiversity comprise the “natural capital” that keeps our ecosystems functional and economies productive. Half of the world’s GDP depends on biodiversity and ecosystem services which include things like fresh water and timber, carbon storage and sequestration, natural landscapes that support tourism, and soil formation. With a steep decline in natural capital in the last 50 years, at least one million species are threatened with extinction. An estimated US$700 billion/year is needed to reverse the loss of biodiversity and ecosystem services by 2030.
The World Bank is one of the largest international financiers of nature and works with partners to mobilize private capital and performance-based financing to deploy solutions across the globe. The World Bank’s integrated ecosystem-economy model sheds light on development risks associated with nature loss and helps identify effective policy responses as part of the World Bank’s contribution to COP15 of the UN Convention on Biological Diversity.
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 believe that this investment highlighting our support for biodiversity conservation helps us not only achieve a financial benefit, but also allows us to contribute to addressing climate change and ocean pollution and aligns with the “long-term sustainability” we seek. 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, “Considering that biodiversity loss has become a global issue, we have positioned ‘conservation of biodiversity (addressing the risks of nature loss)’ as a priority issue. In line with this, efforts are now under way to step up our relevant initiatives. We decided to invest in this bond to show support for the World Bank’s efforts on biodiversity and natural ecosystem conservation. Through ESG investments, we promote the creation of social value by addressing global environmental and social issues and contributing to local communities including through the revitalization of domestic local economy, in line with our management philosophy, ‘Peace of Mind, Forever.’ As a responsible institutional investor, we will continue to manage our assets contributing to social sustainability.”
Citigroup Global Markets Japan Inc. and Morgan Stanley MUFG Securities jointly acted as the bond arrangers. The bond was issued under the World Bank’s Sustainable Development Bond Framework.
Elree Winnett Seelig, Global Head, ESG, Markets, Citi, said, “We are proud to have collaborated with the World Bank and Japan’s leading institutional investors on the first Sustainable Development Bond engaging investors on the topic of biodiversity. Biodiversity is declining at a faster rate than any time in human history. The World Bank’s leadership in addressing the causes of biodiversity loss and its investment in landscape scale restoration complement our objectives, as well as those of our clients.”
Cristina Lacaci, Global Head of ESG Structuring, Global Capital Markets, Morgan Stanley, said, “Morgan Stanley is proud to have worked with the World Bank, along with their Japanese institutional investors, on this transaction raising awareness for biodiversity conservation. The World Bank’s Sustainable Development Bonds are supporting critical financing of sustainable projects in developing markets, and we look forward to continuing to support their sustainability efforts.”
This transaction builds on IBRD’s 8-year AUD Sustainable Development Bond issued for Japanese insurance companies in April 2022, while highlighting support for the World Bank’s holistic approach to climate action. For the transaction announced today, Japanese investors again are showing their collective support for taking action to solve urgent development challenges.
|Issuer:||World Bank (International Bank for Reconstruction and Development, IBRD)|
|Issuer rating:||Aaa /AAA|
|Settlement date:||27 September 2022|
|Maturity date:||27 September 2032|
|Clearing system:||Euroclear Bank SA/NV / Clearstream Banking SA, Luxembourg|
|Underwriter (Bond arranger):||Citigroup Global Markets Limited (Citigroup Global Markets Japan Inc.),
Morgan Stanley & Co. International plc (Morgan Stanley MUFG Securities Co., Ltd)
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization. Created in 1944, it is the original member of the World Bank Group and operates as a global development cooperative owned by 189 nations. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to support the Sustainable Development Goals and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing Sustainable Development Bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. More information on World Bank bonds is available at www.worldbank.org/debtsecurities.
World Bank bonds support the financing of programs that further the Sustainable Development Goals (SDGs). World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association and as such support the financing of a combination of green and social, i.e., “sustainable development” projects, programs and activities in IBRD member countries as described in the World Bank Sustainable Development Bond Framework. The World Bank is also a member of the Executive Committee of the Green Bond, Social Bond, and Sustainability Bond Principles. A key priority for the World Bank’s capital markets’ engagement is building strategic partnerships with investors to promote the importance of private sector financing in sustainable development. The World Bank’s Sustainable Development Bond Impact Report describes how the World Bank engages with investors on the SDGs and raises awareness for specific development challenges.
Net proceeds of the bonds described herein are not committed or earmarked for lending to, or financing of, any particular projects or programs, and returns on the bonds described herein are not linked to the performance of any particular project or program.
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development (“IBRD”), also known in the capital markets as “World Bank”. Any offering of World Bank securities will take place solely on the basis of the relevant offering documentation including, but not limited to, the prospectus, term sheet and/or final terms, as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject to restrictions under the laws of several countries. World Bank securities may not be offered or sold except in compliance with all such laws. The World Bank Sustainable Development Bond Framework and the information set forth therein are not a part of, or incorporated by reference into, the offering documentation.
Heike Reichelt, World Bank Treasury