The Asian Infrastructure Investment Bank (AIIB) and Aberdeen Standard Investments (ASI) have forged a strategic partnership that aims to develop debt capital markets for infrastructure, drive responsible investing in fixed income and build a sustainable environmental, social and governance (ESG) ecosystem in emerging markets in Asia.
The partnership entails the $500 million AIIB Asia ESG Enhanced Credit Managed Portfolio managed by ASI on behalf of AIIB, which will comprise primarily Asian infrastructure-related bonds, including both green and unlabeled issuances, with ESG factors fully integrated in the investment process and portfolio management. The portfolio was approved by the AIIB board of directors in December 2018. ASI was awarded the contract to manage the portfolio through a competitive bidding process.
In addition, ASI will work closely with AIIB to launch of the Sustainable Capital Markets Initiative, which aims to catalyze ESG investing strategies, act as an engine of change to improve ESG standards and build capacity around responsible investing with various market participants including corporate bond issuers, rating agencies and index providers to improve disclosure and expand ESG rating coverage in emerging Asia.
Over the next few decades, institutional investors are expected to play an integral role in financing Asia’s growing infrastructure investment needs. As the region faces some of the most pressing sustainability challenges, integrating environmental and social factors into investment decisions is critical, along with governance.
“We believe that institutional investors are a key part of the solution to finance Asia’s infrastructure investment needs over the coming decades,” said D.J. Pandian, AIIB vice president and CIO. “Integrating ESG standards into capital markets in emerging Asia will be important to achieving long-term sustainable development goals. We look forward to partnering with Aberdeen Standard Investments to achieve our shared vision of sustainable capital markets in Asia.”
