Japan’s GPIF and ADB Partner to Finance Green Projects

ADB and Japan’s GPIF recently formed a partnership to support green project financing through investments in ADB’s green bonds.

The Asian Development Bank (ADB) and Japan’s Government Pension Investment Fund (GPIF) recently formed a partnership to support green project financing through investments in ADB’s green bonds.

“We are pleased to collaborate with GPIF on this important initiative that promotes environment-related investments in Asia and the Pacific and is closely aligned with ADB’s development mandate,” ADB President Takehiko Nakao said.

ADB issues green bonds to finance projects in the Asia and Pacific region that help its developing member countries mitigate greenhouse gas emissions and adapt to the consequences of climate change. ADB issued its first green bond in 2015. It has since issued more than $6 billion equivalent green bonds in various currencies. ADB green bonds provide opportunities for institutional investors, including pension funds and asset managers, to achieve their green mandate.

The green bond investment will help GPIF fulfill its stewardship responsibilities for environment, social, and governance (ESG) investments. GPIF, the largest pension fund in the world in terms of assets under management, can support ADB’s green bond program in a substantial way.

GPIF Executive Managing Director and Chief Investment Officer Hiro Mizuno said that GPIF requires all asset managers to integrate ESG into their investment analysis and decision-making.

“We regard the purchase of Green, Social, and Sustainability Bonds as one of the direct methods of ESG integration in the fixed income investment. GPIF is committed to promoting ESG integration through our investment chain in order to ensure the sustainable performance of the pension reserve fund for all generations,”

Global CO2 emissions have been increasing since 2018; and Asia produces about 40 percent of global emissions.

“Driven by continuous economic growth, accelerating urbanisation, and expanding middle classes, Asia accounts for the majority of rising energy needs worldwide. It is, therefore, essential that the region plays a proactive part in global efforts to reduce emissions from houses and offices, industry, and transport,” ADB Vice-President for Finance and Risk Management Ingrid van Wees said.

ADB will scale up its support for climate change adaptation and maintain its assistance for mitigation through clean energy and energy efficiency projects and sustainable transport. Under Strategy 2030, ADB will ensure that 75 percent of the number of its committed operations will be supporting climate change mitigation and adaptation by 2030.