The Bloomberg MSCI Green Bond Index aims to offer investors a objective measure of the global market for fixed income securities issued to fund projects with direct environmental benefits.
It is the seventh year in a row that the index has claimed the Environmental Finance Bond Award for Index of the year, in a resounding vote of confidence from the green bond market for an index first launched in 2014.
According to MSCI, the index's evaluation is independent, research-driven and ensures that eligible green bonds adhere to established Green Bond Principles. It also classifies bonds in terms of how they use proceeds and which environmental projects are funded and supported.
Meghna Mehta, vice president at MSCI ESG Research, says: "The Bloomberg MSCI Green Bond Index is representative of the global green bond market and covers assessment of all investment grade self-labelled green bonds to determine eligibility for the index..As part of the assessment process, green credentials of these bonds are evaluated against a rigorous green bond methodology and only bonds meeting the technical criteria of the methodology are added to the index.
This award recognises Bloomberg and MSCI's efforts last year to ensure the index was aligned with Sustainable Finance Disclosure Regulation Article 8 and Article 9 fund requirements by developing a set of exclusionary screening criteria, which were added following a client consultation held in June 2022.
MSCI ESG Research also conducted a client consultation in November 2022 to discuss updating the index's use of proceeds criteria and set priorities. Feedback collected from this consultation will inform updates to the technical criteria of the methodology which should be implemented in 2023.
"The green bond methodology is updated regularly based on consultations with clients and other market participants to reflect developments in the green bond and green funding space," says Mehta.