Investors back call for Britain to issue ‘Green +’ gilts

LONDON, Oct 7 (Reuters)Investors managing more than 10 trillion pounds ($13 trillion) on Wednesday backed a call for Britain to join a growing number of countries issuing sovereign bonds to help fund environmentally friendly projects and bolster social goals.

Thirty groups including Schroders SDR.L and Natwest said they supported the idea of a ‘Green +’ gilt, as proposed by the Green Finance Institute, the Impact Investing Institute and the LSE Grantham Research Institute on Climate Change and the Environment.

Unlike a straight green bond, the Green + gilt would also help the government meet social goals such as creating jobs.

The proposal comes days after Prime Minister Boris Johnson pledged to ‘build back greener’ from the COVID-19 pandemic and as Britain gears up to host the next round of global climate talks in 2021.

“The UK’s first green sovereign bond, issued at scale, would catalyse the development of the sterling green bond market, and would send a signal to global capital markets and policymakers of the UK’s commitment to sustainable finance,” the groups said in their proposal.

“We would welcome the UK government issuing a Green+ Gilt. It would be a clear commitment to the environment, to both investors and future generations,” said Peter Harrison, Chief Executive Officer at Schroders.

“It would help attract further capital into this important area. Financing greener infrastructure and jobs are long-term investments that will support sustainable economic growth.”

A total of 16 countries have so far issued green bonds, most recently Sweden and Germany, where both issues were oversubscribed, the group said.

($1 = 0.7746 pounds)

(Reporting by Simon Jessop Editing by Alexandra Hudson)

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