Bryn Jones, lead manager of the GBP2.6 billion Rathbone Ethical Bond Fund, has added exposure to government bonds for the first time by investing in the UK’s green gilts.
This is the first time that the UK has entered the green gilt market, which aims to help fund green projects including clean infrastructure, wind and hydrogen power.
Jones has lobbied the Debt Management Office for the past ten years for the issuance of green gilts, calling for the exclusion of nuclear power from the list of eligible projects.
He says: “The issuance is a positive initial signal, and it shows that the UK is on the right path, joining other countries issuing green bonds. We’ve been instrumental in pushing these bonds with the DMO over many years, so we’re pleased they have been issued at last. We have included the green gilts in the portfolio to manage duration and liquidity, whilst providing vital financing to future growth of the green economy and supporting the race to net zero carbon emissions.
“We expect this year’s bonds to encourage more companies to start issuing green bonds as they recognise the strong demand for such securities. This should help broaden our opportunity set in sterling issuance.”
Kate Elliot, head of ethical, sustainable and impact research at Rathbone Greenbank Investments, says: “This financing framework is a tool to accelerate a clear existing sustainability pathway rather than a fig leaf to hide a lack of climate commitments.
“It is great to see that investors’ concerns regarding nuclear power have been reflected in the government’s decision to explicitly exclude it from the list of eligible projects, preventing exposure to a significant area of concern. Additionally, biodiversity and natural capital are prioritised, while the inclusion of nature-based solutions such as peatland restoration is certainly encouraging.”
