Goldman Sachs Asset Management announced today the launch of the Goldman Sachs Global Green Bond UCITS ETF, a new Article 9 fund tracking a bespoke index developed with Solactive, tracking the performance of investment-grade bonds denominated in G10 currencies.

The new ETF comes follows several years of growth in green bond issuance, as corporate and government issuers move to finance climate transition plans, and companies in hard-to-abate sectors invest in capital intensive projects to meet decarbonization commitments. Moody’s Investor Service in a recent report forecast green bond issuance to grow to $580 billion in 2024.

Bram Bos, Global Head of Green, Social & Impact Bonds at Goldman Sachs Asset Management, said:

“The widening range of issuers include companies and governments around the world, seeking investment to drive their plans to reduce greenhouse gas emissions and guard against physical climate risks.”

The new fund provides exposure to the Solactive Global Green Bond Select Index developed in partnership with Goldman Sachs Asset Management’s dedicated Green, Social and Impact Bonds team. As part of the index methodology, the team applies their enhanced sustainable investment screening at both the issuer and bond level. The index seeks to include companies with a lower climate risk than comparable passive benchmarks.

Eligible investments for the index include treasury, corporate, government-related, and securitized bonds denominated in G10 currencies, with the methodology including bonds that fund activities including low carbon energy,  sustainable water and wastewater management, green buildings, low-carbon transportation, sustainable management of living natural resources and land use, low carbon information and communications technology, green manufacturing, and sustainable waste management.

According to Goldman Sachs, the fund aims to enable investors to replace a portion of their existing global fixed income portfolios with bonds that meet certain sustainable investment screens, including controversy exclusion, project and sector exclusions and an analysis of issuers’ climate transition policies.

Hilary Lopez, Head of EMEA Third Party Wealth at Goldman Sachs Asset Management, said:

“The global green bond market is an increasing source of opportunity for investors as they look to complement their fixed income exposure with dedicated green, social and impact bonds. We are delighted to be launching this innovative product which brings the expertise of our green bonds team to an ETF format for the first time.

“We plan to continue expanding our product range to support our clients’ investment and sustainability objectives.”