Washington, D.C., October 11, 2017—The World Bank Group and Japan’s Government Pension Investment Fund (GPIF) have formalized a partnership that aims to expand markets for sustainable investing.
Under the partnership, the World Bank Group and GPIF will collaborate on initiatives that promote strategies for including environmental, social and governance criteria in investment decisions across different asset classes. Ultimately, the aim is to direct more capital towards sustainable investments.
Investors are increasingly looking for opportunities to have a positive impact, but data and standards for incorporating environmental, social and governance considerations vary across asset classes. For example, the link between investment performance and sustainability considerations is better understood for equity than for fixed income markets.
To address these gaps, as a first step the World Bank Group and GPIF will develop a joint research program that will explore practical solutions for integrating sustainability considerations into fixed income portfolios. Potential areas of research include benchmarks, guidelines, rating methodologies, disclosure frameworks, reporting templates and risk correlation for incorporating environmental, social, and governance considerations into fixed income portfolios, including for sovereigns and sustainable bond markets.
“Together with GPIF, we are embarking on an ambitious initiative to transform the way asset owners and managers see investment opportunities,” World Bank Group President Jim Yong Kim said. “We can’t achieve the Sustainable Development Goals and meet the world’s rising aspirations without a much bigger contribution from the private sector. Our experience has shown that good environmental, social, and governance standards translate into good investments. And there’s never been a better opportunity to do this: there’s more than $40 trillion on the sidelines, where investors are looking for better returns. The GPIF is one of the world leaders in sustainable investing, and together we can help make the global market system work for everyone.”
Hiro Mizuno, GPIF Executive MD and CIO, said: “This is a unique opportunity for GPIF and the World Bank Group to make a valuable contribution towards the Sustainable Development Goals, providing practical solutions to catalyze the development of sustainable fixed income markets. This partnership strongly reflects GPIF’s strategic commitment in advancing the integration of environmental, social and governance considerations in all asset classes of its portfolio.”
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and development expertise for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in pursuing the World Bank Group’s mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.
GPIF is the world’s largest pension fund with 1.37 trillion dollars and manages and invests the reserve fund of the public pension system in which all Japanese people must participate. GPIF’s goal is to achieve the investment return required for the public pension system with minimal risk solely for the benefit of pension beneficiaries from a long-term perspective and contribute to the stability of the system. Since its establishment in 2001, GPIF made the gain of 520 billion dollars by the end of June 2017. For more information, please visit www.gpif.go.jp.