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CPPIB to Become First Major Pension to Issue Green Bonds

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On the back of the G-7 summit in Quebec, the Canada Pension Plan Investment Board (CPPIB) announced plans to issue green bonds dedicated to generating funds for investment in wind and solar power, sustainable water and waste management, and energy-efficient buildings, making it the first large public pension fund to sell debt securities for the backing of eco-friendly projects.
The AAA-rated fund’s statement said the inaugural bonds will be denominated in Canadian dollars and issued on a private placement basis to certain qualified accredited investors, but did not specify when the sale would take place or how much would be on offer.

Increasingly Canadian pensions such as PSP Investments, CDPQ and CPPIB have been snapping up renewable energy plants, whether in wind or solar, across North America and in some instances in Europe and Latin America.

“The issuance of green bonds is a logical next step to CPPIB’s investment-focused approach to climate change, and we are pleased to be a pioneer among pension funds in this regards,” said Poul Winslow, senior managing director and global head of capital markets and factor investing at CPPIB.

Green Bonds in Asia

Hundreds of billions could be raised over the next five years in green bonds by Asian entities, according to SWFI calculations. In June, the International Finance Corporation (IFC) and the Monetary Authority of Singapore (MAS) signed a Memorandum of Understanding (MOU), agreeing to work together to accelerate the growth of green bond markets in Asia. The MoU aims to promote internationally-recognized green bond standards and frameworks. The Hong Kong Monetary Authority (HKMA) revealed that between January 2018 and May 2018, the Hong Kong as a city issued HK$ 39 billion worth of green bonds. In May, the Bank of China raised a US$ 1 billion green bond issue. Swire Properties and Beijing Capital Group each raised US$ 500 million in green bonds.

Think Tanks Reveal Needs

Annual issuance of the environmentally friendly securities reached US$ 155 billion in 2017, a 78% increase over the year previous, and is expected to reach US$ 1 trillion by 2020, according to the Climate Bonds Initiative. The Climate Bonds Initiative is financially majority-backed by the Rockefeller Foundation, Bank of America, National Australia Bank (NAB), Bloomberg Philanthropies and the Swiss government.

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Trump Goes Across the Political Aisle to Nominate Nellie Liang to Federal Reserve Board

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U.S. President Trump nominated Nellie Liang to the Federal Reserve Board of Governors. She is a long-time staff member of the Federal Reserve, joining in 1986 as a research economist. Liang must still be confirmed by the U.S. Senate pending the job post. She is a graduate of University of Notre Dame in 1979 and received her doctorate from the University of Maryland in 1986.

Ms. Liang is a registered Democrat.

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Ivanhoé Cambridge to Acquire Callahan Capital Properties

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Ivanhoé Cambridge, a unit of Caisse de dépôt et placement du Québec (CDPQ), signed a deal to acquire Callahan Capital Properties (CCP). Eastdil Secured advised on the transaction. CCP is Ivanhoé Cambridge’s investment partner of six years.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Manager of China’s Foreign Reserves Could be CalPERS Next CIO

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Numerous financial media outlets, including the Wall Street Journal (WSJ), are reporting that Ben Meng is in key position to become Chief Investment Officer of CalPERS. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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