Defined contribution master trust Smart Pension, London, invested with the Mirova Green Bond Fund for its first green bonds exposure.
Smart Pension invested an initial £200 million ($242 million) and expects to reach £400 million within two years, a spokesman said.
The Mirova Global Green Bond Fund directly funds projects aimed at high environmental and social positive impact, a Smart Pension news release said. When launched in 2015, Mirova said that its green bond strategy's approach includes specific analysis of each project financed, ESG analysis of the issuer and fundamental financial analysis.
In June, Smart Pension committed its default growth fund to be net-zero by 2040. Paul Bucksey, CIO of the £2.2 billion ($2.7 billion) Smart Pension Master Trust, said in the release that more than 70% of its flagship growth fund has been invested in sustainable funds for a while, and the Mirova green bond investment "coupled with other recent changes bring us to 100%."
The allocation to the Mirova fund represents10% of the default fund, the spokesman said, and all funds within it meet Article 8 or Article 9 of the European Commission's Sustainable Finance Disclosure Regulation criteria.
Fiona Smith, investment proposition manager at Smart Pension, said in the release that Mirova "provides transparency and traceability to make sure the funds really do make a difference. Green bonds are an important addition to our growth fund because they directly fund environmental projects and have a tangible impact on the world around us."
The Smart Pension Master Trust serves 1 million participants, the release said. Mirova had £22.2 billion in AUM as of Sept. 30.