Thematic investments are an ideal way to tackle specific sustainability topics. We mainly target investments that contribute to a low-carbon economy and facilitate the mitigation of climate change. An effective way to do this is by investing in infrastructure renewables and green bonds. For the latter we use the Green Bond Principles (GBP) issued by the International Capital Market Association as guiding principles for our investments. We were holding USD 1.8 billion in green bonds as of year-end 2019.

Workers on a construction site (photo)

Inclusion is one of three cornerstones of our Responsible Investing strategy. Our thematic investments include social infrastructure projects such as hospitals, student dorms and affordable housing.

To further expand our thematic investments, we also include social and sustainability bonds in our allocation, investing in bonds whose use of proceeds helps tackle the challenges faced by underserved groups or populations. This enables us to embrace positive social impacts as an additional thematic focus. For social bonds we use the Social Bond Principles (SBP) and for sustainability bonds the Sustainability Bond Guidelines (SBG) issued by the ICMA as guiding principles for our investments. Overall, we increased our target for our green, social and sustainability bond mandate to USD 4 billion, to be achieved by the end of 2024.

Infrastructure is an attractive asset class for our investment portfolio given its credit quality and inherent liquidity premium. Our infrastructure investments are assessed against a catalogue of ESG parameters to evaluate the underlying sustainability risk.

  • 13% of our infrastructure investments are allocated to renewable energy such as wind farms and solar panels.
  • 21% of our infrastructure investments are allocated to social infrastructure such as hospitals, student dorms or affordable housing projects.

In our 2019 Financial Report, we disclose further information on our climate change-related investment risk exposure.

In the context of our Inclusion approach, we also measure our real-world impact and align it to the Sustainable Development Goals. As part of our Responsible Investing strategy, we mainly focus on the five SDGs shown in the graph below.

Our thematic investments support the SDGs
Our thematic investments support the SDGs (graphic)

As of 31 December 2019