Microsoft and Ford invest in $1 billion bond for climate projects and Morgan Stanley launches sustainable investing institute

Companies around the world are becoming more aware of climate change. For that reason, they invest millions in green projects.

One example is the case of Ford and Microsoft. They were among 50 investors in a $1 billion green bond launched last week to support “climate smart” investments in emerging markets.

It marks the second $1 billion green bond transaction this year from the International Finance Corporation (IFC), member of the World Bank Group and an international financial institution which offers investment, advisory, and asset management services to encourage private sector development in developing countries.

Proceeds of IFC green bonds are used for private sector investments in renewable energy, energy efficiency and other areas that reduce greenhouse gas emissions, such as installing solar and wind power capacity and providing financing for technology that helps produce energy more efficiently.

Progress is being made with bonds of all sizes, ranging from relatively small issues from individual companies to the huge issues being orchestrated by the likes of IFC. Earlier this year, green power company Good Energy raised $24 million to expand its renewable energy portfolio — three times its initial target — while in April the European Investment Bank secured $80 million from a bond issue to invest in renewable power and energy efficiency projects.

On the other hand, Morgan Stanley has decided to get into sustainable investments in a big way, announcing the Morgan Stanley Institute for Sustainable Investing.

The goal is to advance market-based solutions to economic, social and environmental challenges by bringing sustainable investments to significant scale.

There are three areas of focus: financial products that make it possible for clients to invest in sustainability-focused strategies while getting strong risk-adjusted financial returns; thought leadership that helps mobilize significant capital; and strategic partnerships that build capacity and best practices in scalable sustainable investing.

The Institute’s first major commitments are: A goal of $10 billion in client assets through Morgan Stanley’s Investing with Impact Platform in the next five years; an annual Sustainable Investing Fellowship at Columbia Business School, coupled with a hands-on internship at Morgan Stanley, will develop thought leadership and investment strategy for the effort; and a $1 billion investment in a sustainable communities initiative that provides rapid access to capital to preserve and enhance quality affordable housing that’s either deteriorating into uninhabitable conditions or becoming unaffordable to low- and moderate-income households.


maria soler