Rathbones Asset Management has become one of the lead investors in the new World Bank Amazon Reforestation Outcome Bond.
In a statement on 14 august, the London-headquartered asset manager said both the Rathbone Ethical Bond Fund and the Rathbone Greenbank Global Sustainable Bond Fund, managed by head of fixed income Bryn Jones and fund manager Stuart Chilvers, are now invested in this first principal-protected bond that supports reforestation anywhere in the world, linking the investor return to the project outcomes using carbon removal credits.
It is also the first with this structure that supports the Amazon or any project in Latin America.
The World Bank Amazon Reforestation Outcome Bond is designed to provide upfront financing for reforestation initiatives selected by Mombak, a company based in Brazil, specialising in large-scale reforestation projects in the Amazon.
A portion of the bond’s targeted return will be linked to the value of carbon credits generated by these projects. An amount equal to a portion of the coupons that normally would be paid by the World Bank will instead finance the restoration of deforested and degraded lands. Investment returns on the bond are linked to the value of carbon credits ultimately generated by these projects.
Stuart Chilvers, co-fund manager of the Rathbone Greenbank Global Sustainable Bond Fund and portfolio manager for Rathbone Ethical Bond Fund says: “We are thrilled to support this innovative transaction, that will provide funding to reforestation efforts in the Brazilian Amazon – a globally crucial region. We believe this bond offers both the exciting prospect of measurable environmental impact, and potentially attractive financial returns for our funds.”
