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 US $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.
In addition, through bespoke research and active engagement, ASI will work closely with AIIB on the launch of the Sustainable Capital Markets Initiative, which aims to catalyse 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, AIIB Vice President and Chief Investment Officer DJ Pandian said.
Over the next few decades, institutional investors are expected to play an integral role in financing Asia’s growing infrastructure investment needs, AIIB said. As the region is facing some of the most pressing sustainability challenges, integrating environmental and social factors into investment decisions is critical, along with governance. In close alignment with AIIB’s objectives and ASI’s investment philosophy, the project aims to unlock the potential of ESG investing and mobilise private capital to support the region’s sustainable development.
The Asia ESG Enhanced Credit Managed 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.