ZURICH • Zurich Insurance Group AG plans to more than double its allocation to impact investments, earmarking US$5 billion (RM20.55 billion) for a broader range of assets after devoting US$2 billion to green bonds in recent years.
While it didn’t specify a period, Zurich plans to buy bonds that finance social projects and the sustainable use of resources, as well as investments in private equity geared to these goals, Switzerland’s biggest insurer said in a statement yesterday.
The allocation represents about 2.6% of Zurich’s US$190 billion portfolio, mainly consisting of debt securities.
Demand for impact investments is surging, making them one of the fastest-growing asset classes. Variously labelled as sustainable, responsible or ethical investing, the field encompasses 26% of assets under management globally, almost US$23 trillion, according to a 2016 report by the Global Sustainable Investment Alliance. Europe and Australia lead markets with about half of managed assets considering sustainability criteria, according to Bloomberg Intelligence.
Earlier this year, Swiss Re-announced that it was moving its entire investment portfolio of US$130 billion to ethically based benchmark indexes from traditional ones. UBS Group AG recently raised US$325 million from clients for The Rise Fund, whose investments include US$120 million for EverFi Inc, a provider of digital educational material, and US$50 million for Dodla Dairy Ltd, which helps small farmers in southern India.
“Zurich will invest in different types of impact investments in various asset classes and around the globe,” the insurer said in the statement.
“In addition, it will establish a measurement framework to track the impact of these investments.”