Japanese Life Insurance Companies Collaborate to Support Climate Action through World Bank AUD and NZD Bonds

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today issued two 15-year green bonds – an AUD 274 million and NZD 241 million, both due September 2036.

A group of Japanese life insurance companies invested in the bonds to support the financing of climate projects and the critical role the multilateral development banks play in providing climate finance in developing countries as momentum builds for the United Nations Climate Change Conference, known as COP 26, in November 2021. This is the first time Japanese life insurance companies have come together to invest in bonds to show their collective support for the urgency of climate action. Listed alphabetically, The Dai-ichi Life Insurance Company, Fukoku Mutual Life Insurance Company, Nippon Life Insurance Company, and Sumitomo Life Insurance Company participated in the transaction.

Citigroup Global Markets Limited acted as the underwriter of this transaction (Citigroup Global Markets Japan Inc. is the bond arranger).

Jingdong Hua, Vice President and Treasurer, World Bank, said, “The World Bank is the largest single source of climate finance to developing countries. Private investors play a critical role in channeling needed resources to World Bank member countries as they work to reduce emissions and build greener and more resilient communities and economies. We are grateful to Japanese life insurance companies for coming together to show their support for climate finance in developing countries and thank them for their investment.”

Kazuyuki Shigemoto, Executive Officer, Chief General Manager, Investment, The Dai-ichi Life Insurance Company, said, “The Dai-ichi Life, as a “universal owner” that manages funds broadly, aims to deliver both financial returns on our investments and contribute to improving social issues through ESG investment, which is a pillar of our asset management strategy. As part of these efforts, we invested in this World Bank bond to support the financing of projects that support low-carbon transition in developing countries. As a responsible institutional investor, we will continue to actively engage in ESG investment to contribute to realizing a sustainable society as well as to improve investment returns through sophisticated and diverse investment methods.”

Takehiko Watabe, Director and Managing Executive Officer, Fukoku Mutual Life Insurance Company, said “Fukoku Life has endeavored to support sustainable growth of society and the environment amid climate change via ESG investments. As a mutual life insurance company with a strong focus on the public, we strive to be an organization that promotes real mutual aid, based on the concept “THE MUTUAL”．Fukoku Life is very pleased to support the World Bank’s commitment to climate finance in developing countries and we believe this investment helps us achieve not only a financial benefit, but also contribute positively to society in line with our company philosophy.”

Akiko Osawa, Director and Executive Officer, Chief Investment Officer, Nippon Life Insurance Company, said, “Responding to climate change is an urgent issue on a global scale, and there is increasing international momentum toward the implementation of climate change countermeasures ahead of COP26. We are honored to help support developing countries address climate change while improving the returns of our portfolio, through the investment in a green bond issued by the World Bank. We will further enhance asset management that realizes profitability, security and the public good, which we have been working on since our founding, from a medium- to long-term perspective, taking into account ESG perspectives. We will promote such ESG investment and financing that is unique to Nippon Life, strive to better serve the interests of policyholders, and contribute to realizing a sustainable society.”

Iwao Matsumoto, Managing Executive Officer, Sumitomo Life Insurance Company, said, “Sumitomo Life decided to invest in this bond in support of the World Bank’s efforts to mitigate climate change, which is an urgent and global issue for everyone. Reduction of greenhouse gas emissions is an important issue that should be addressed across national borders, and we expect that the investment will support the financing of decarbonization and environmentally friendly projects in developing countries. As a responsible institutional investor, Sumitomo Life will contribute to the realization of a sustainable society and enhanced return.”

Keita Matsumoto, Head of Investor Sales, Citigroup Global Markets Japan Inc., said, “Amid rising international momentum for climate change measures ahead of COP26, we strongly believe that the investment by Japanese institutional investors in World Bank green bonds will further boost public and private sector support in Japan for developing countries. Citi is committed to providing USD 500 billion in environmental finance by 2030 to promote the transition to a low-carbon economy, and we will continue to work with the World Bank, Japanese institutional investors, and other key stakeholders to promote environmental finance.”

The World Bank has issued over 185 green bonds in 23 currencies, totaling nearly USD 16 billion equivalent since its inaugural issue in 2008. World Bank Green Bonds support the financing of projects in member countries that meet specific criteria for low carbon and climate resilient growth, seeking to mitigate climate change or help affected people adapt to it. The types of eligible projects include renewable energy installations, energy efficiency projects, and new technologies in waste management and agriculture that reduce greenhouse gas emissions and help finance the transition to a low carbon economy. They also support the financing of forest and watershed management and infrastructure projects that prevent climate-related flood damage and build climate resilience. World Bank Sustainable Development Bonds, which support the financing of a mix of green and social projects, are also key to supporting member countries to reduce emissions and strengthen adaptation and resilience in line with the World Bank’s Climate Change Action Plan 2021-2025 published in June 2021.

Transaction Summary