Launching a new offering for sustainability-linked bonds by Border to Coast
Border to Coast, a Leeds-based LGPS pool, has announced plans to launch a new sustainability-linked bond fund next year. The new fund will be part of Border to Coast's wider fixed income offering, aiming to provide access to green, social, and sustainability debt for its partner funds.
The details about the management structure of the new fund are not yet disclosed. However, it has been revealed that a responsible investment manager will be hired to help shape and deliver the pool's approach to verification and impact reporting for green, social, and sustainability bonds. The manager will also be responsible for developing the pool's approach to incorporating responsible investment across its fixed income offering.
The global sustainability-linked bond (SLB) market is growing steadily, with around USD6 trillion in cumulative aligned sustainable debt (including SLBs) by early 2025. Despite a slowdown in early 2025 due to increased scrutiny over the credibility of transition strategies, pricing, and market design, SLBs remain an important instrument for incentivising decarbonisation and climate risk management. Europe, in particular, is a key driver in the SLB market and is well positioned to reignite growth.
Europe is on track to be the largest green bond issuer worldwide, with major sovereigns, corporates, and financial institutions providing rigorous target setting and innovative financial structures. The green or sustainability-linked market is primarily dominated by European issuers, with more than $1trn in sustainability-linked debt having been issued as of last year. The sustainability-linked debt market might be on track to pick up again, with Europe at the forefront of driving the market forward.
Enhancing transparency, target rigour, and market innovation appear critical to future growth, especially in European SLBs. The new role in Border to Coast's sustainability-linked bond fund includes monitoring of third-party verification providers and assessing the credibility of issuer-level sustainability disclosures.
Border to Coast currently offers three fixed income funds, which include Sterling-denominated Index-Linked Bonds, Investment-Grade Credit, and Multi-asset Credit. The pool has not yet disclosed whether the fund will be internally managed or involve allocations to third-party funds.
Recent global developments include a record quarter for social and sustainability-labelled debt issuance, with Q1 2025 showing strong volumes in sustainable and social bonds, highlighting sustained momentum despite macroeconomic challenges. Development banks also had a record quarter, pricing USD63.6 billion in sustainable debt.
As the world continues to grapple with climate change and sustainability issues, the launch of Border to Coast's new sustainability-linked bond fund is a significant step towards promoting responsible investment and fostering a more sustainable future.
References: - Climate Bonds Initiative, Q1 2025 Sustainable Debt Global State of Market Report, July 2025 - Net Zero Investor, resilience of green bonds and UK issuer role, July 2025 - IEEFA, Sustainability-linked bonds: Why Europe can reignite the market, July 2025
The new sustainability-linked bond fund launched by Border to Coast next year will be part of their wider business strategy, aiming to provide access to green, social, and sustainability debt for its partner funds in the finance sector. To shape and deliver this approach, a responsible investment manager will be hired, tasked with developing the pool's approach to incorporating responsible investment across their fixed income offering, and ensuring credible verification and impact reporting for green, social, and sustainability bonds.
