Goldman Sachs Asset Management (GSAM) has launched the Goldman Sachs Biodiversity Bond Fund, a pioneering fixed-income product designed to support biodiversity conservation and restoration efforts. The fund marks a significant expansion of GSAM’s sustainable investing strategy, aligning with investor demand for solutions that go beyond climate targets to encompass nature preservation.
A Fixed-Income Solution for Biodiversity Finance
The biodiversity bond fund will invest primarily in investment-grade corporate bonds across both developed and emerging markets. It will include both labeled green, social, and sustainability bonds—where proceeds directly fund biodiversity-related projects such as afforestation, conservation, and pollution prevention—as well as conventional corporate bonds issued by companies generating revenue aligned with biodiversity restoration.
The fund is classified under Article 9 of the EU’s Sustainable Finance Disclosure Regulation (SFDR), the highest standard for sustainable investments. Its portfolio will target key United Nations Sustainable Development Goals (SDGs), including SDG 6 (Clean Water and Sanitation), SDG 12 (Responsible Consumption and Production), SDG 14 (Life Below Water), and SDG 15 (Life on Land).
Meeting Growing Investor Demand for Nature-Based Solutions
According to Bram Bos, Global Head of Green, Social, and Impact Bonds at GSAM, investor interest in biodiversity-focused financial products has grown significantly.
“There is a growing focus among investors to consider not just pure climate targets but also maintaining and improving biodiversity. This fund seeks to provide fixed income investors with exposure to issuers that are making a positive impact on biodiversity,” Bos stated.
The fund will be managed by GSAM’s sustainable and impact fixed-income team and will use the Bloomberg Aggregate Corporate Index as a reference benchmark. It will provide exposure across multiple currencies, including the US dollar, euro, and British pound, ensuring broad accessibility for institutional investors.
Expanding Goldman Sachs’ ESG Investment Lineup
This launch follows GSAM’s continued expansion in the sustainable fixed-income space. The firm’s existing suite of ESG bond funds includes the Goldman Sachs Impact Corporate Bond Fund, the Goldman Sachs Social Bond Fund, and the Goldman Sachs Global Green Bond UCITS ETF, launched in 2023.
GSAM aims to raise between $300 million and $500 million over the next three to five years for the biodiversity bond fund. The strategy is expected to appeal particularly to European investors, where interest in nature-based investments is at its strongest, though GSAM also sees potential growth in markets such as Asia and the Middle East.
Biodiversity Finance Gains Traction in Global Markets
The launch comes at a critical moment for biodiversity finance. Global negotiations on biodiversity funding, including discussions in Rome aimed at mobilizing $200 billion annually for nature conservation by 2030, highlight the increasing urgency of integrating biodiversity considerations into mainstream financial markets.
While biodiversity-linked financial products remain a niche segment within the broader ESG investment landscape, GSAM’s initiative signals an effort to embed biodiversity considerations into traditional fixed-income markets.
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Source: theglobaltreasurer.com
