Launch of new bond offering linked to sustainability on the Border to Coast platform
Border to Coast Launches Sustainability-Focused Bond Fund
In a significant move, Border to Coast, a Leeds-based LGPS pool, has announced plans to launch a new sustainability-linked bond fund next year. This expansion of the pool's fixed income offering aims to provide green, social, and sustainability debt to its partner funds.
The global sustainability-linked debt market, while experiencing a slight decrease, has shown a cumulative volume surpassing USD 6 trillion by mid-2025. However, sustainability-linked bond (SLB) issuance has faced a short-term slump, particularly in the first half of 2025. This decline is likely due to macroeconomic pressures such as inflation, geopolitical tensions, and regulatory uncertainties impacting overall market confidence.
Despite the challenges, Europe is on track to become the largest green bond issuer worldwide. The UK green bond issuance rose 10% year-on-year in H1 2025, driven mainly by financial institutions. However, sustainability-linked bonds have not fared as well, with a steep fall in issuance.
Looking ahead, the Climate Bonds Initiative anticipates ongoing growth in the aligned sustainable debt markets, with trillions more annually before 2030 as decarbonization and just transition efforts scale globally. The EU's regulatory push and investor demand for credible sustainability-linked instruments are likely to encourage recovery and growth in SLB issuance, although the near-term pace may be restrained by market volatility and macroeconomic headwinds.
Border to Coast's commitment to responsible and transparent investment practices is evident in its new role for a responsible investment manager. This role involves monitoring third-party verification providers and assessing the credibility of issuer-level sustainability disclosures. The responsible investment manager will also develop the pool's approach to incorporating responsible investment across its fixed income offering.
The new fund will offer access to various debt categories that align with sustainability goals. However, it remains unclear whether the pool's current fixed income funds will be expanded to include sustainability-linked debt. The pool has not yet disclosed whether the fund will be internally managed or involve allocations to third-party funds.
The information about the current state and trends in the sustainability-linked debt market was shared by the World Bank. Border to Coast's spokesperson shared this information with Room151. Despite the decrease, more than $1 trillion in sustainability-linked debt had been issued as of last year.
Border to Coast currently manages three fixed income funds, including Sterling-denominated Index-Linked Bonds, Investment-Grade Credit, and Multi-asset Credit. With the launch of the new sustainability-linked bond fund, the pool is poised to make a significant contribution to the growing sustainable debt market.
[1] Climate Bonds Initiative. (2025). Global Green Bond Market Report 2025 H1. [2] World Bank. (2025). Sustainability-Linked Bond Market: Trends and Developments. [3] European Central Bank. (2025). Financial Stability Review. [4] International Energy Agency. (2025). World Energy Outlook 2025.
In the realm of finance and business, Border to Coast's planned sustainability-focused bond fund expansion is anticipated to inject green, social, and sustainability debt into its partner funds, aligning with global efforts towards decarbonization. Despite the current slump in sustainability-linked bond (SLB) issuance, Europe, particularly the UK, is expected to witness growth in green bond issuance, with EU regulatory push and investor demand boosting the recovery and growth of SLB issuance in the future.
