Rathbones Asset Management has become one of the lead investors in the new World Bank Amazon Reforestation Outcome Bond.
The Bond is designed to provide upfront financing for reforestation initiatives selected by Brazilian company Mombak, specialising in large-scale reforestation projects in the Amazon.
Rathbones said a portion of the bond’s targeted return will be linked to the value of carbon credits generated by these projects. An amount equal to a portion of the coupons that normally would be paid by the World Bank will instead finance the restoration of deforested and degraded lands. Investment returns on the bond are linked to the value of carbon credits ultimately generated by these projects.
Both the Rathbone Ethical Bond Fund and the Rathbone Greenbank Global Sustainable Development Bond Fund are now invested in the new bond.
Stuart Chilvers, co-fund manager of the Rathbone Greenbank Global Sustainable Bond Fund and portfolio manager for Rathbone Ethical Bond Fund, said: “We are thrilled to support this innovative transaction that will provide funding to reforestation efforts in the Brazilian Amazon, a globally crucial region. We believe this bond offers both the exciting prospect of measurable environmental impact, and potentially attractive financial returns for our funds.”
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