[ad_1]
The Saudi Public Investment Fund has been increasing investment in companies that have benefited from the fossil fuel transformation, which reflects Saudi Arabia’s broader strategy of diversifying its economy and getting rid of its dependence on crude oil sales.
go through Bloomberg
Saudi Arabia’s US$430 billion sovereign wealth fund plans to announce the first green bond issuance because it hopes to increase the role of environmental, social and governance principles in its investments.
The public investment fund will announce the green offering “soon”, Governor Yasir Al-Rumayyan said at a virtual event on Tuesday. Al-Rumayyan, chairman of Saudi Aramco, the world’s largest oil company, said that as everyone knows, PIF is still working with BlackRock to develop an ESG framework.
The boom in global sales seems to bring the issuance of ethical bonds to US$1 trillion this year, and the UK broke records for its first green bond issuance this week. PIF’s green loans will be the first green loans of a sovereign wealth fund, and the kingdom, one of the world’s largest oil exporters, is seeking to reshape its reputation on environmental issues.
The government will announce the details of its own environmental plan at a meeting next month. In September, the Ministry of Finance has appointed HSBC Holdings plc and JPMorgan Chase as their joint structured agents for the sustainable financing framework.
“We are working with many domestic and international partners from all over the world to better comply with everything we do,” Al-Rumayyan said. He said that as part of developing its own ESG framework, PIF is seeking to “gradually” reject investments that lack its own sustainable development plan.
New focus
PIF has been investing more in companies that benefit from the fossil fuel transition, which reflects the country’s broader strategy of diversifying its economy and getting rid of its dependence on crude oil sales. It increased its stake in the Saudi producer ACWA Power International, which has invested heavily in renewable energy from solar to hydrogen, and invested in the electric car manufacturer Lucid.
At the same time, Saudi companies are subject to scrutiny by other sovereign investors. According to a white paper published in April last year, the Norwegian Ministry of Finance has decided that companies in the kingdom should not be part of the benchmarks used by its wealth funds. The white paper aims to impose more ethical and environmental standards on its investments.
Saudi Arabia is planning to establish a regional carbon credit and offset trading exchange to promote efforts to reduce harmful emissions.
According to a statement earlier this month, PIF is cooperating with the Saudi Stock Exchange, which it owns, to establish a voluntary trading platform in Riyadh. The exchange will allow carbon credit and offset trading in the Middle East and North Africa.
However, the details of the exchange are few, and the statement did not specify when the trading platform will be launched or how it will operate.
According to Reuters, PIF also hired five international banks as members of the ESG team for its medium-term financing strategy. Saudi Arabia’s wealth fund had previously borrowed from global banks and recently raised $15 billion from lenders, which it plans to use to finance new transactions.
[ad_2]
Source link