Climate change is one of the most critical issues facing society. As highlighted by the United Nations, its effect is felt worldwide, as it disrupts national economies and impacts people and communities dearly. As a result, immediate action is required if the most catastrophic damages are to be avoided. But while climate change poses a direct risk to businesses, it also presents us with an unprecedented opportunity to take action against it. Green bonds, a recent addition to the global fixed income universe, have emerged as a unique and responsible investment opportunity, which can help tackle climate change. Green bonds enable investors to purchase securities debt earmarked for projects which support a low carbon economy. They help finance a myriad of different initiatives, including among many others, renewable energy, pollution prevention, energy efficiency and biodiversity preservation.

The green bond market’s evolution

Since 2007, the green bond market has rapidly developed, mainly thanks to development banks and subsequently local authorities. In 2013, the market exploded with the emergence of private players such as commercial banks and other corporate entities. In 2016, sovereign issuances appeared, a trend which is expected to grow steadily going forward. Therefore, virtually all types of issuers – sovereign, supranational and agency (SSAs), financials, corporate and sovereigns - have now entered the market. Developing countries and especially China are beginning to take the lead over Europe, and have injected new impetus into the sector. In 2017, global issuance reached USD$155.5bn1, taking the total market size to more than USD$300bn. Notably, the Climate Bonds Initiative (CBI)2 estimates that green bond issuance will reach USD$250 - $300bn in 2018.

Not for Retail distribution: This document is intended exclusively for Institutional/ Qualified Investors and Wholesale/ Professional Clients only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly. This communication is for informational purposes only and does not constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services and should not be considered as a solicitation or as investment, legal or tax advice. Opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision. This communication is issued by: Issued by AXA Investment Managers UK Ltd, registered in England No 01431068. The registered office address is 7 Newgate Street, London EC1A 7NX. AXA Investment Managers UK Ltd is authorised and regulated by the Financial Conduct Authority. Telephone calls may be recorded for quality assurance purposes. IW50363 05/2017. In other jurisdictions, this document is issued by AXA Investment Managers’ affiliates in those countries, including AXA Investment Managers UK Ltd (which is authorized and regulated by the FCA).

© AXA Investment Managers 2017. All rights reserved.

Design & Production : Internal Design Agency (IDA) | 07/2018 | 27 - 10149