The World Bank’s recent Sustainable Development Bonds have supported awareness initiative for the importance of combating food loss and waste.
Food loss and waste is part of Sustainable Development Goal 12.3 halving food waste by 2030.
Since March 2019, when the World Bank launched the first Sustainable Development Bond to raise awareness of food loss and waste with the Folksam Group, the World Bank has issued US$ billion equivalent through 25 Sustainable Development Bonds in ten currencies, while engaging with investors to raise awareness for the importance of combating food loss and waste.
This includes a recent 1.75 per cent NOK 1 billion bond due March 13, 2025, with SEB as the sole lead manager.
World Bank bonds support the financing of sustainable development projects and programs in member countries.
This includes US$4.6 billion in lending that IBRD is providing to middle income countries to address food loss and waste, with investments in infrastructure, access to markets and logistics, and waste management. Reductions in food loss and waste can deliver diverse dividends, including combatting hunger, supporting sustainable food production, diets and consumption, and ultimately addressing climate change, given that losses and waste account for eight percent of annual global greenhouse gas emissions.
A range of banks, asset managers, insurance companies and pension funds have shown their support, especially in Japan. Japanese investors accounted for almost eighty percent of the transaction volume so far, including Norinchukin Bank which invested a total of approximately US$1.2 billion.
“Norinchukin Bank has invested in these bonds to support the World Bank’s efforts to reduce food loss and waste, which is a global issue. Our investments are in line with the sustainable management philosophy of Norinchukin Bank and we believe it will contribute to stable earnings through international diversification of our investments. As a leading bank that supports agriculture, fishery and forestry industries, food production and consumption, and the daily lives of local communities, Norinchukin Bank will continue to make investments that contribute to solving environmental and social issues in cooperation with the World Bank,” said Keito Shimbu, Head of Global Investments, Norinchukin Bank.
Other Japanese investors include Dai-ichi Life Insurance Company and Fukoku Mutual Life Insurance Company.
Retail investors have also shown interest through bonds offered by Okasan Securities, Naito Securities, Nomura Securities, Tsubasa Alliance, and a current offering by Tochigin Tokai Tokyo Securities and Senshu Ikeda Tokai Tokyo Securities.
“The swift and steady demand from investors – especially in Japan – to raise awareness for the critical challenge of food loss and waste demonstrates the role that the capital markets and other private sector partners can play in supporting solutions through their own assets and operations,” said Yoshiyuki Arima, Japan Representative, World Bank Treasury.
With annual issuances between US$50-US$60 billion, World Bank bonds support the financing of programs that support the Sustainable Development Goals. World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Markets Association. The World Bank is also a member of the Executive Committee of the Green Bond and Social Bond Principles. A key priority for the World Bank’s capital markets engagement is building strategic partnerships with investors to promote the importance of private sector financing in sustainable development.