ICE SUSTAINABLE FINANCE

Impact Bond Indicator~Analysis of GPIF Portfolio~
July 2023

Table of Contents
1

EXECUTIVE SUMMARY ......................................................................................................................... 3

2

INTRODUCTION ................................................................................................................................... 4
2.1
WHAT ARE IMPACT BONDS? ............................................................................................................... 4
2.1.1 Classification of Impact Bonds .......................................................................................................... 4
2.1.2 What Are Impact Metrics? ................................................................................................................ 4
2.2
THE GROWING IMPORTANCE OF IMPACT BONDS ...................................................................................... 53

SCREENING GPIF BOND UNIVERSE ........................................................................................................ 6
3.1
OVERVIEW...................................................................................................................................... 6
3.1.1 Impact Bond Composition ................................................................................................................. 6
3.2
IMPACT BONDS ‐ SCOPE AND COVERAGE ................................................................................................ 7
3.2.1 Bonds In Scope .................................................................................................................................. 7
3.2.2 Impact Bond Categorization ............................................................................................................. 8
3.2.3 Impact Bonds without Impact Metric ............................................................................................. 10

4

IMPACT BOND DATA .......................................................................................................................... 12
4.1
DATA SOURCES .............................................................................................................................. 12
4.2
DATA STRUCTURE........................................................................................................................... 12
4.2.1 Pooled Data .................................................................................................................................... 12
4.2.2 Bonds with Multiple Impact Metrics ............................................................................................... 12
4.2.3 Bonds Without Impact Metrics ....................................................................................................... 13
4.2.4 Bonds with Other Impact Metrics ................................................................................................... 13

5

IMPACT METRIC MATCHING .............................................................................................................. 14
5.1
IDENTIFYING IMPACT METRICS ........................................................................................................... 14
5.1.1 Impact Metric Selection .................................................................................................................. 14
5.1.2 Impact Metric Groupings ................................................................................................................ 14
5.2
BONDS WITHOUT IMPACT METRICS .................................................................................................... 15

6

METHODOLOGIES .............................................................................................................................. 17
6.1
OVERVIEW.................................................................................................................................... 17
6.2
STANDARDIZATION OF VARIABLES ...................................................................................................... 17
6.2.1 Standardization of Impact Metric ................................................................................................... 17
6.2.2 Standardization of Units ................................................................................................................. 17
6.2.3 Exchange Rates ............................................................................................................................... 18
6.3
DATA PREPARATION ........................................................................................................................ 18
6.3.1 Pooled Bonds .................................................................................................................................. 18
6.3.2 Multiple Impact Metrics.................................................................................................................. 18
6.3.3 Bonds Without Impact Metrics ....................................................................................................... 18
6.4
CALCULATION OF IMPACT CONTRIBUTION ............................................................................................. 19
6.4.1 Latest Year Approach ...................................................................................................................... 19
6.4.2 Cumulative Approach...................................................................................................................... 19

7

RESULTS AND ANALYSIS ..................................................................................................................... 20

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7.1
OVERVIEW.................................................................................................................................... 20
7.1.1 Total Impact for Impact Bonds ....................................................................................................... 20
7.2
IMPACT METRIC RESULTS ................................................................................................................. 21
7.2.1 Annual GHG Emissions Reduced Avoided Types of Projects ........................................................... 21
7.2.2 Annual Energy Savings .................................................................................................................... 21
7.2.3 Annual Renewable Energy Generation ........................................................................................... 22
7.2.4 Capacity of Renewable Energy Plants Constructed or Rehabilitated .............................................. 22
7.2.5 Number of People Benefited ........................................................................................................... 22
7.2.6 Number of Students Reached ......................................................................................................... 22
7.2.7 Number of Jobs Created and/or Retained ...................................................................................... 22
7.3
IMPACT METRIC DISTRIBUTION PER US $100,000 INVESTED (LATEST YEAR) ................................................ 22
7.3.1 Annual GHG Emissions Reduced Avoided Types of Projects ........................................................... 23
7.3.2 Annual Energy Savings .................................................................................................................... 23
7.3.3 Annual Renewable Energy Generation ........................................................................................... 24
7.3.4 Capacity of Renewable Energy Plants Constructed or Rehabilitated .............................................. 24
7.3.5 Number of People Benefited ........................................................................................................... 25
7.3.6 Number of Students Reached ......................................................................................................... 25
7.3.7 Number of Jobs Created and/or Retained ...................................................................................... 26
7.4
REAL WORLD IMPACT (LATEST YEAR) .................................................................................................. 27
8

FUTURE DEVELOPMENTS ................................................................................................................... 28

9

CONCLUSIONS ................................................................................................................................... 29

10

APPENDIX .......................................................................................................................................... 30
10.1
10.2
10.3

GHG EMISSIONS SCOPES ................................................................................................................. 30
FRAMEWORKS ............................................................................................................................... 31
ADDITIONAL METRICS ..................................................................................................................... 33

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1 Executive Summary
The Japanese Government Pension Investment Fund (GPIF) is seeking to better understand andreport the Environmental and Social Impact of the investments within its portfolio. Intercontinental
Exchange, Inc. (ICE) is assisting GPIF to achieve this through a detailed analysis of the Transition
Risks and Opportunities of GPIF’s portfolio.
In this report, impact from eligible green and social projects from GPIF’s holdings of Environmental,
Social and Governance (ESG) Impact Bonds is examined. To this end, a framework andmethodology were developed to identify, assess, compare, and report the estimatedEnvironmental and Social Impact across seven specific Impact Metrics, as well as providing an
overall portfolio impact.
The analytical framework developed aims to provide GPIF with tools to assess the Impact
Contribution of individual investments (Impact Bonds) across various categories of impact fromEmissions Reduction and Renewable Energy Generation through to Social Impacts such as Job
Creation.
Through a structured framework of standardization and normalization of numerous variables,
including impact objectives of individual bonds, ICE performed a detailed analysis of GPIF’s
portfolio impact, in terms of US $ amount invested.
The results of the analysis allow for a direct comparison regarding the relative effectiveness(impact per US $ invested) of individual investments, which could assist GPIF with future
investment decision making.
For context, the results for each of the Impact Metrics are also expressed in terms of real-world
impact, highlighting the direct relative effectiveness of investments.

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2 Introduction
2.1

What are Impact Bonds?

Impact Bonds are financial instruments (fixed income) that facilitate the capital raising andfinancing of projects which have specific aims and objectives to provide positive outcomes andbenefits for society or the environment more broadly. Impact Bonds will tend to be issued forspecific projects, either individual or multiple projects per bond, and will often have stated metrics
against which the impact of the project being financed can be measured1.
2.1.1

Classification of Impact Bonds

Impact Bonds tend to fall into distinct categories according to the type of project they are funding
and the associated anticipated impact. The International Capital Markets Association (ICMA)
provides frameworks for identifying impact bonds and provides definition for the different types ofprojects being funded by an Impact Bond. ICMA identifies three main types of Impact Bond
categories:
Green Bonds - aimed at financing projects with environmental benefits, and projects consistent
with a transition to a net zero carbon emissions economy.
Social Bonds - for funding socially sound and sustainable projects that achieve greater social
benefits.
Sustainability Bonds - provide financing to a combination of both green and social projects.
A fourth category of Impact Bond, Sustainability Linked Bonds (SLBs), is considered out of
scope for this analysis since the proceeds from SLBs tend not to be assigned to specific projects.
A similar classification of Impact Bonds to that defined by ICMA has been used for the initial
identification and categorization process under this analysis. A deeper assessment of theobjectives of the relevant bonds was then carried out to allow a more granular analysis of thespecific types of impact, followed by a regrouping of the bonds into three main categories to provide
a high-level summary. A detailed description of this process is provided below.
2.1.2

What Are Impact Metrics?

Impact bonds are issued to finance specific projects or groups of projects with the aim of deliveringreal-world positive outcomes. To measure the effectiveness and extent of the impact of theseprojects, specific performance related metrics related to the outcome or objective of the individualor pool of bonds (multiple bonds from an issuer, pooled together for reporting purposes) are often
published during the lifetime of the bond. We refer to these metrics as Impact Metrics for the
purpose of this report.
There are many different types of Impact Bonds with a variety of different Impact Metrics. These
can range from emission reduction targets for green bonds to job creation for social bonds.
Impact Bonds can also have more than one Impact Metric if the real-world outcomes can bemeasured in more than one way, e.g. a decrease in non-renewable energy consumption can also
be measured with a reduction of greenhouse gas emissions. The bond could also be used tofinance projects across more than one category (Green and Social). Hence, the associated Impact
Metrics of a bond can be diverse.

1

https://www.icmagroup.org/sustainable-finance/the-principles-guidelines-and-handbooks/

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The Impact Metrics we have defined for this report should not be confused with Key Performance
Indicators (KPIs) used for SLBs. While the KPIs for SLBs are used to measure the performance of
the issuer of the bond in a chosen area, they can also affect the coupon or redemption rate of thebond. Hence, KPIs are very specifically defined and typically relate to a company’s broader
performance, while the Impact Metric used in this report intend to capture the impact of the use ofproceeds from individual Impact Bonds and their funded projects.

2.2

The Growing Importance of Impact Bonds

Global issuance of Impact Bonds has been growing in recent years, a trend that has continued into
2023. Indeed, Impact Bond issuance had a strong start to the year, with US$487 billion of Impact
Bonds launched in the first half of 2023. This represents 12% growth year on year2.

USD Billion

Exhibit 1: Global Issuance of Green, Social and Sustainability (GSS) Bonds
$600
$500
$400
$300
$200
$100
$0
1H

2H
2019

1H

2H
2020

With Second Party Opinion

1H

2H

1H

2021

2H
2022

1H
2023

Declared by the Issuer

Source: ICE Quarterly Impact Bond Report, June 30, 2023

2

ICE Impact Bond Analysis Q2 2023, https://www.ice.com/insights/impact-bond-report-q2-2023

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3 Screening GPIF Bond Universe
3.1

Overview

Screening of GPIFs universe of bonds was carried out to identify the bonds in scope for the
analysis. The bonds in the GPIF portfolio were compared to the ICE Impact Bond database3 using
the ICE Impact Bond Classification Service4 to identify which bonds were Impact Bonds and thecategory of each Impact Bond.
Bonds that were identified as Impact Bonds were categorized by the specific impact objectives(Use of Proceeds) of the bond and the metric used to assess progress (Impact Metrics). The
information reported by the issuer, in both pre and post issuance reports, was used for the
categorization process. The methodology and approach used to categorize individual bonds by
their Impact Metrics is explained in more detail below in Section 6.
The high-level categorization system used to identify if a bond in the GPIF portfolio is in scope forthe analysis follows the ICMA frameworks. Under these frameworks Impact Bonds are classified
in three different categories - Green, Social and Sustainability.
For the purposes of this analysis, only labelled Impact Bonds 5 were included as the Use ofProceeds from these bonds tend to be more clearly defined to specific projects, as previously
explained in 2.1.1.
3.1.1

Impact Bond Composition

The Impact Bond screening process shows that the GPIF portfolio is more heavily weighted
towards bonds with an environmental (Green) rather than social objective and consequently the
impact metrics captured by our analysis are representative of this composition. This heavier
weighting towards Green objectives is, however, consistent with the broader impact bond market
generally.
The regular analysis and tracking of Impact Bond issuance carried out by ICE (see ICE Quarterly
Impact Bond Report 6 ) highlights the broader tendency of Impact Bond issuance with Green
objectives, relative to Impact Bonds with Social and combined Sustainability objectives. This canbe seen in the below chart showing analysis of Global Impact Bond issuance by bond type on ahalf-yearly basis over the last 4 years to June 30th, 2023.

3

ICE Impact Bond Database compiled for multiple sources including data from the Luxembourg
Exchange
4
ICE Impact Bond Classification
5
Impact bonds are defined as green bonds, social bonds and sustainability bonds that are either
declared as such by the issuer or certified by a third party.
6
ICE Impact Bond Analysis Q2 2023, https://www.ice.com/insights/impact-bond-report-q2-2023
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USD Billion

Exhibit 2: Global Issuance of GSS Bonds by Bond Type
$350
$300
$250
$200
$150
$100
$50
$0
2019

2020

2021

2022

2023

2019

2020

2021

2022

2023

2019

2020

2021

2022

1H

1H

1H

Green Bond

Social Bond

Sustainability Bond

With Second Party Opinion

2023

Declared by the Issuer

Source: ICE Quarterly Impact Bond Report, June 30, 2023

3.2

Impact Bonds - Scope and Coverage

3.2.1

Bonds In Scope

The screening process assessed all the bonds held within the GPIF portfolio, comparing these to
the ICE Impact Bond database. Of the 18,254 bonds within the GPIF portfolio as of 31 March 2023,
1,456 were identified as Impact Bonds and were considered for this study, representing nearly 8%of the total GPIF bond portfolio as of 31 March 2023.
The below chart (Exhibit 3) shows the proportion of the GPIF universe to be considered for thisstudy in terms of the number of Impact Bonds relative to the other bonds in the GPIF portfolio,
namely Japanese Domestic Bonds and Other Global Bonds.
Exhibit 3: GPIF Holding (¥)

Bond Type

Impact Bonds(1,456 bonds)

2 trillion

Japanese Domestic Bonds(4,478 bonds)

46 trillion

Global Bonds(12,320 bonds)

48 trillion

0

20

40

60
Trillion

GPIF Holding (¥)

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3.2.2

Impact Bond Categorization

Of the 1,456 bonds considered, 1,324 Impact Bonds were identified as in scope for the analysis
and categorized by the main three different types, based on the Impact Metrics associated witheach individual bond. The process of mapping Impact Metrics and categorizing the individual
bonds is explained in more detail below in Section 5. The three different categories used to classify
the impact bonds are:Green Bonds
Social Bonds
Sustainable Bonds

The 132 SLBs identified in the GPIF portfolio are considered out of scope (as explained in 2.1.1.)
and are not included in the chart below (Exhibit 4).
Exhibit 4: Proportion of Impact Bond Type Breakdown (in Scope7)

259

205
860

Green

SocialSustainable

The Impact Bonds identified as in scope were analysed in detail to determine the Impact Metrics
associated with each individual bonds. The below chart shows the breakdown of the Impact Bonds
in scope by those with at least one (or more) Impact Metric reported by the issuer and those without
any Impact Metrics reported by the issuer. As can been seen in Exhibit 5, 52% of the impact bonds
considered in scope have at least one reported Impact Metric.

7

Sustainability Linked Bonds (132) are not in scope for the Impact Bond Project

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Exhibit 5: Proportion of Impact Bonds with Reported Impact Metrics

633

691

Bond with at least One Reported Impact Metric
Bond with No Reported Impact Metric

The below chart shows the proportion of the GPIF portfolio in terms of invested amount (in USD)
which is covered by at least one reported Impact Metric, the proportion for which an estimatedImpact Metric was produced and the proportion with no Impact Metrics. Overall, nearly $11Bn ofinvested proceeds could be assessed for impact.

Impact Metric Coverage

Exhibit 6: Impact Metric Coverage by GPIF Investment Amount
Bond with No Reported Impact Metric(364 bond)

2.8 billion

Bond with at least One Estimated Impact Metric(269 bond)

1.8 billion

Bond with at least One Reported Impact Metric(691 bond)

8.8 billion
-

1

2

3

4

5

6

7

8

9

10

1 Billion
Invested Amount USD

The Impact Bonds with reported Impact Metrics are mapped to High-Level Impact Categories.
These High-Level categories are defined as Environmental, Social and Environmental + Social (acombination of both environmental and social impacts).
The mapping process considered the type of Impact Metric(s) with each Impact Bond. If forexample, there are multiple Impact Metrics and these all relate to climate/environmental projects,
the Impact Bond is mapped to the “Environmental” High-Level category. As can been seen in
Exhibit 7, 65% of the Impact Bonds in scope with reported Impact Metrics are assigned to theEnvironmental High-Level category, 15% to the Social category and 20% to the Environmental +Social Category.

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Exhibit 7: Proportion of Impact Bonds with Reported Impact Metrics mapped to High-Level
Category

139

102
450

Environmental

3.2.3

SocialEnvironmental + Social

Impact Bonds without Impact Metric

Exhibit 8: Impact Bonds with No Reported Data and/or Impact Metrics

294
339

Issued less than 18 months ago

Issued more than 18 months ago

As mentioned above, not all the Impact Bonds identified for analysis in the GPIF portfolio havereported data or Impact Metrics. This could be for a number of reasons. The most common reason
is that a bond has been recently issued, and a report has not yet been published by the issuer.
Hence, data and/or Impact Metrics would not necessarily be expected for this bond. To identify
where this could be the case an 18-month time frame was set since for bonds issued less than 18months ago (i.e. since January 2022), reporting would not necessarily be expected considering atypical 12 month reporting period with a further 6 month grace period for producing and publishing
the report. For bonds issued more than 18-months ago (i.e. before January 2022), reporting would
be expected.
In the above chart (Exhibit 8) the Impact Bonds identified without data or Impact Metrics are
displayed, split by issue date - less than 18-months ago and more than 18-months ago. As canbeen seen, 294 bonds without Impact Metrics are identified as having been issued more than 18months ago. Reporting would normally be expected for these bonds.
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Exhibit 9: Impact Bonds with No Reported Data and/or Impact Metric & follow one or more
Frameworks
CBI

20

EU Taxonomy

6

ICMA Green Bond

165

ICMA Social Bond

71

ICMA Sustainability Bond

40

LMA

33

No Framework

108

Other

73
0

20

40

60

80

100

120

140

160

180

No. of Bonds (ISINs) Alignedwith a Framework

Impact Bonds within the GPIF portfolio that do not have a reported Impact Metric and were issued
more than 18-months ago (294 bonds) (where a reported Impact Metric was expected but notavailable), were checked to see if they aligned to a recognised sustainability framework8 listed
below. It was found that these bonds did align to sustainability frameworks. In fact, the majority ofbonds aligned to more than one of the frameworks, hence the above chart (Exhibit 9) includes
double counting.
The sustainability frameworks against which the bonds within the GPIF portfolio were aligned to
are:
 CBI
 EU Taxonomy ICMA Green Bond ICMA Social Bond ICMA Sustainability Bond LMA
 Other
 No Framework

8

See Appendix 10.2 for Framework definitions.

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4 Impact Bond Data
4.1

Data Sources

The bonds in the GPIF portfolio were compared to the ICE Impact bond database using the ICE
Impact Bond Classification Service to identify which bonds were impact bonds and the category ofeach Impact Bond. The ICE Impact Bond database is compiled using publicly available security
documentation such as bond prospectuses, termsheets and exchange listing records. It also draws
on the Luxemburg Stock Exchange Sustainability Bond database which contains use of proceeds
information collated from pre- and post-issuance documentation such as Allocation and Impact
Reports.
Further information regarding each Impact Bond was also collected, including the category of thebond, the Impact Metric against which the bond is reporting, dates of the bond, scope of reportingfrom issuer, whether the bond reporting is on a standalone basis or is part of a pool9 of the issuer’s
impact bonds, the value of the bond and value of associated bond pools.
The data collected for each individual bond included:
 Bond issuer
 Category of bond
 Impact metric(s) against which the bond is reporting Scope of reportingo Individual or pooled bond
 Value of bond and value of associated pool
 Date of latest post-issuance report Maturity date of bond (and years to maturity)

4.2

Data Structure

4.2.1

Pooled Data

When calculating pool values, the assumption is that 100% of bond issued amounts are includedin the pool value. It is also assumed that each pool of bonds is funding a single project and that
the Impact Metrics relate to this single project.
For pooled bonds, the total pooled amount is taken, or alternatively the sum of all bonds in pool istaken. The bonds within the pool are adjusted for any differing issuing currencies and converted to
US $. Any dead or expired bonds are removed, leaving just the live bonds within the pool in US$ terms.
Once a pool value for every pool is produced, the proportion that the pool makes up is calculated
so a pro-rate Impact Metric value for each bond can be calculated.
For this analysis, the refinancing of bonds was not taken into account.
4.2.2

Bonds with Multiple Impact Metrics

If a bond has a combination of environmental and social metrics, it was considered necessary toapportion the bond proceeds separately to environmental and social impacts because thesecannot typically be achieved with the ‘same dollar’. If the full bond proceeds are associated with
9

Pool refers to a group of bonds from the issuer whose proceeds are grouped together for reporting
purposes and allocated to one or more eligible projects.

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each metric, it could be considered to be ‘double counting’. So, to be more representative ofproceeds allocation to both social and environmental objectives, a straightforward 50% / 50%
allocation between Environment and Social Impact Metrics was used.
4.2.3

Bonds Without Impact Metrics

As shown in Exhibit 5 above, the proportion of bonds in the GPIF portfolio with no Impact Metrics
reported was 48% and so warranted some further analysis in order to fairly represent thecontributed impacts for those bonds from eligible environmental and social projects from ESG
bonds in the GPIF portfolio. To achieve this, estimated impacts were applied to some of the bonds(20%). The methodology explaining this in more detail can be found in section 5.2.
4.2.4

Bonds with Other Impact Metrics

Many bonds have Impact Metrics disclosed in post-issuance reports, but which are not using astandardised measure. These are placed under a category of ‘Other’ because they cannot becompared with metrics from other bonds. Bonds with Metrics that fall into the ‘Other’ category are
not considered in the summary.

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5 Impact Metric Matching
5.1

Identifying Impact Metrics

5.1.1

Impact Metric Selection

Analysis of the Impact Bonds identified within the GPIF portfolio against the ICE Impact Bond
database reveals around 50 different impact metrics being referenced. For the purpose of thisanalysis, tracking the performance of these impact bonds across so many difference metrics would
not give meaningful results, given the number of bonds reporting some of the metrics would bevery small, but the analysis required would still be extensive.
Hence, the 50 identified Impacts Metrics were narrowed down to smaller focus groups,
representing the Impact Metrics against which the largest number of bonds had reported. Exhibit
10 indicates the frequency at which each of the impact metrics are referenced and identifies themost commonly occurring metrics. The Other (standard) group represents all the otherstandardised metrics grouped together. The Other (non-standard) group is defined in 4.2.4 above.
Exhibit 10: Most Commonly Reported Impact Metrics

Annual GHG Emissions Reduced/Avoided

64%

Annual Energy Savings

36%

Annual Renewable Energy Generation

30%

Capacity of Renewable Energy Generation

28%

Number of Students Reached9%

Number of People Benefited6%

Number of Jobs Created or Retained

6%

Other (Standard)

33%

Other (Non-standard)

24%
0%

10%

20%

30%

40%

50%

60%

70%

The 7 Impact Metrics identified as most commonly reported are:
 Emissions Reduced Avoided
 Energy Savings
 Renewable Energy Generated
 Capacity of Renewable Energy Plants Constructed or Rehabilitated Number of People Benefited Number of Students Reached Jobs Created and/or Retained
5.1.2

Impact Metric Groupings

So as not to lose sight of other Impact Metrics which have been reported by an issuer, but which
are not the focus of analysis, all 50 metrics are grouped into further categories:Emission Reduction
Energy Efficiency
Renewable

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







Water and Waste Management
Clean Transportation
Biodiversity and Sustainable Land Use
Green Building
Social - Other, Green Building
SocialSocial - Other

The bonds are then categorised by which types of metric they are reporting, which are then in turngrouped into three main “high-level categories”.
The High-Level Categories of Impact and their corresponding groupings are:

Environmentalo Emission Reductiono Energy Efficiency
o Renewable
o Water and Waste Managemento Clean Transportationo Biodiversity and Sustainable Land Useo Green Building
Socialo Socialo Social - Other
Environmental + Social
o Where a combination of Impact Metrics in the above two categories are reported.

The breakdown of bonds into these categories is shown in Exhibit 7 of section 3.2.2 above.
This more granular level of analysis at Impact Metric level, followed by the regrouping into highlevel Impact Categories allows for the consideration of all reported metrics, even when they are
not the focus of deeper analysis.
Hence, given the alignment to the underlying objectives and the consistency of reporting within the
Impact Metrics and Impact groups, these 7 Impact Metric categories and the 3 High-Level Impact
groupings are used for the purpose of presenting the results of this report.

5.2

Bonds without Impact Metrics

Not all the identified Impact Bonds within scope have published Impact Metrics. This may include
recently issued bonds (issued within the past 18-months), where the issuer has not yet publisheda report.
For some cases where Impact Metrics are not provided estimations have been made using
assumptions based on categorisation by region, issuer type and category of impact.
There are a number of conditions that need to be met for an estimation of the Impact Metric to be
carried out. Firstly, a minimum sample size is required for an estimation. Also, only ‘Green’ bondsin the GPIF portfolio were selected to create estimates.

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The estimation is based on the categorisation of bonds defined by a combination of type of impact,
type of issuer and region. These parameters were used to define a categorization key.
A minimum of 10 bonds with reported Impact Metrics is required per categorization key to beconsidered for estimation.
Estimated values for the Impact Metric per $1000 of holding is calculated then multiplied by the
GPIF holding value.
Impact Metrics are estimated for all bonds in a category, irrespective of age.
Exhibit 11: Estimation Categorization Key Factors
Type of Impact

Type of Issuer

RegionEnergy Efficiency

Corporate

EU

Renewable

FinancialUK

Sovereign

North America

Supranational

Japan

Agency (SSA)

APAC10-Ex Japan
Asia11
Global (Other)

10

APAC, for the purposes of these calculations, includes Australia, Korea (Republic of), Thailand,Hong Kong, Philippines, New Zealand and Singapore.
11
Asia, for the purposes of these calculations, includes Iran (Islamic Republic of) and India.
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6 Methodologies
6.1

Overview

The challenges to developing a framework for measuring and comparing the impact of different
bonds are manyfold, including the fact that Impact Bonds are issued with a wide array of objectives
and Impact Metrics across different Impact Categories with different reporting units of impact. Also,
bonds may be issued as individual bonds or as part of a pool of bonds financing multiple projects
across different Impact Categories.
The process of categorising Impact Bonds into specific groupings of Impact Metrics and HigherLevel Impact Categories allows for the standardisation of the reporting units within a given Impact
Metric grouping and High-Level Impact Category. To allow for more direct comparisons within each
Impact Metric and Category an approach using impact per US $ invested was chosen. This isreferred to as the Impact Contribution.
The Impact Contribution approach (impact per US $ invested) provides the ability to compare theimpact of bonds within Impact Metrics and Categories, it also allows the investor to make ongoingassessments regarding the relative impact of their investments.
Within this approach two different methodologies were utilized to provide Impact Contributions forboth the Latest Year and Cumulatively.
The Latest Year methodology calculates the Impact Contributions for the latest year a bond is held,
while the Cumulative methodology provides the Impact Contribution on a cumulative basis,
assuming a bond is held to maturity.
Both methodologies provide useful information, although the Cumulative methodology uses anumber of assumptions, including that the distribution of the impact is assumed to be constantthroughout the lifetime of the bond. This does not take into account if the impact is seen at the endof the bond when a project comes on stream, or if the impact is a one-off, which can be the casewith some Social Impact bonds.

6.2

Standardization of Variables

6.2.1

Standardization of Impact Metric

To enable a consistent approach to be applied to the analysis of each individual Impact Bond, thevariables for each bond need to be standardized. This includes the standardization of the Impact
Metrics, the level of reporting of the metrics and the categorization of the impact metrics. The
treatment of pooled bonds and bonds with multiple Impact Metrics need to be taken into account,
while bonds with no reported Impact Metrics had to be estimated.
The approach to reporting the Impact Metrics can vary between bonds, even for bonds within thesame category. Metrics can be reported at a global, bond or project level. For pooled bonds, themetric can be reported at an aggregated pooled level. Hence, the method for reporting has beenstandardized to the bond level across all the Impact Bonds.
6.2.2

Standardization of Units

The units of reporting Impact Metrics by the issuer varied across the Impact Bonds within the GPIF
portfolio. Even bonds within the same category or Impact Metric type were found to have differing
units of measurement. To be able to calculate a single Impact Metric the units of measurement
within each Impact Metric category were standardize and normalised to a single unit ofmeasurement so that direct comparisons can be made.
ICE Impact Bond Indicator ~Analysis of GPIF Portfolio~ | July 2023

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Eighty-seven different units of measurement across all the Impact Bonds in scope were identified.
These 87 units of measurement were mapped to a common standardized unit of measurement foreach of the Impact Metrics. For the Impact Metrics in focus for this analysis, the standardised unitsof measurement are as follows:
Impact Metrics

Unit

Annual GHG Emissions Reduced Avoided

tCO2eAnnual Energy Savings

MWh

Annual Renewable Energy Generation

MWh

Capacity of Renewable Energy Plants Constructed or Rehabilitated

MWh

Number of People Benefited

PeopleNumber of Students Reached

Students

Jobs Created and/or Retained

Jobs

6.2.3

Exchange Rates

All the different currencies of bond issuance were normalised into US $ with the exchange rate asof March 31, 2023, to be consistent with the GPIF portfolio date used for the overall analysis. The
source for the exchange rates was the UK HMRC12.

6.3

Data preparation

6.3.1

Pooled Bonds

For pooled bonds, the total pooled amount, or the sum of all bonds in a pool is taken, adjusting forthe different reporting/issuance currencies. Any dead or expired bonds are then removed leaving
just the live bonds within the pool.
Once the pool value for every pool is calculated, the proportion of the pool represented by eachindividual bond is then calculated so a pro-rated Impact Metric value for each bond can beproduced.
6.3.2

Multiple Impact Metrics

For bonds with Impact Metrics across both an environmental and a social theme, efforts are madeto avoid a ‘double counting’ effect – i.e., avoid applying the same US $ spend to different positive
impacts that may not be achievable with the same proceeds. Where this was the case, 50% of theissued amount of the bond is applied to an environmental, and 50% to a social Impact Metric
6.3.3

Bonds Without Impact Metrics

As further defined in section 5.2, Bonds without Impact Metrics were estimated taking into accountcategorization by region, issuer type and impact category, ensuring a sufficient sample size.

12

https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2023-monthly

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6.4

Calculation of Impact Contribution

The Impact Contribution calculations (Impact Metric / US $1000 invested) provide the output of
Impact for each of the 7-Impact Metrics, per US $1000 invested.
To reach the Impact Contribution values, several variables are required for each Impact Bond. This
includes, Bond Issued Amount, Scope of Reporting (bond by bond or pool of bonds), Bonds within
the Pool (where applicable), Pool Volume (where applicable), Metric Value and Unit. Where thepool volume was not reported, the volume was calculated from the issued amounts of all the live
bonds in the pool. Once all bonds reported as part of a pool had an associated pool value, theproportion (%) of the pool that an individual bond represents was calculated.
Two different approaches were examined to generate the Impact Contribution:

Latest Year Approach
Cumulative Approach

These approaches will now be explained in more detail:6.4.1

Latest Year Approach

To calculate the Impact Contributions for the latest year a bond is held, the reported Impact Metrics
are divided by the issued amount of the bond. Where the Impact Metrics are reported for a pool ofbonds, the Impact Metrics are pro-rated to apportion to the individual bond.
Impacts Metrics that are reported on a cumulative basis (applies to all Impact Metrics studied where‘annual’ is not in the description), an average across the number of years from issuance to themost recent impact report is taken.
The pro-rated impact value is then utilized in the calculation to arrive at a US $ value. The per US$1 values are then multiplied by the GPIF holdings (normalised into US $) to provide an assumed
value of the contribution to positive impacts made from eligible environmental and social projects
from ESG bonds in the GPIF portfolio - Impact Contribution.
For bonds with Impact Metrics across both an Environmental and a Social theme, efforts weremade to avoid a ‘double counting’ effect – i.e. applying the same US $ spend to different positive
impacts that may not be achievable with the same spend. Where this was the case, 50% of theissued amount of the bond was applied to environmental, and 50% to social metrics.
6.4.2

Cumulative Approach

To calculate the Impact Contribution using the Cumulative approach it is assumed that a bond isheld to maturity. However, there are a number of perpetual bonds (10 bonds), and longer dated
bonds within the portfolio which have the tendency to skew some of the metrics. This problem wasaddressed by introducing a cap on the maturity of bonds at 20-years (namely, the year 2043) forthe longer dated and perpetual bonds.
To calculate cumulative impacts until maturity of the bond, the number of years to maturity is
calculated from the date of the last impact report produced and the per US $1 value is multipliedby the number of years. To achieve the portfolio view of GPIF contributions to positive impacts
cumulatively, the per US $1 values are multiplied by GPIF holdings (normalised into US $).

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7 Results and Analysis
7.1

Overview

The GPIF portfolio is more heavily weighted towards bonds funding an environmental objective
and consequently the impact metrics captured in this report are representative of that. This heavier
weighting is, however, representative of the proportion of bonds issued in the market ingeneral. See figure Exhibit 1 for market view of issuance by bond type as of June 30, 2023.
The focus of Impact Metrics chosen for the GPIF analysis was based on those most commonly
reported amongst the issuers of bonds held. The most commonly reported metric was Annual GHG
Emissions Reduction/Avoidance, which was reported on by 64% of the bonds reporting impact
metrics. Consequently, a positive Annual GHG Emissions Reduction contribution can be reported
for the GPIF holdings of over 5.2 million tons of CO2 equivalent.
Across the 691 bonds that had reported Impact Metrics in the GPIF universe, the majority (450)
were reporting on Environmentally themed impacts. There were a further 139 bonds which
reported on a combination of Environmental and Socially themed impacts. The measurement of areduction in Annual GHG Emissions was the most commonly reported metric, and when looking
at the impacts per $1000 invested, resulted in a contribution of a reduction of 838 tonnes of CO2(or equivalent) emissions. If the weighting of the GPIF holdings is then taken into consideration,
the contribution is a reduction of over 5.2 million tonnes of CO2 (or equivalent) emissions, which
in real world terms is equivalent to the carbon sequestered by around 6.2 million acres of forests(in one year) which is around 11.5 times the size of Tokyo, Japan!
7.1.1

Total Impact for Impact Bonds

The Total Impact of Bonds with Impact Metrics are shown in the table below (Exhibit 12). The tableshows the total impact value (or aggregated impact), and total impact including estimates, for eachof the 7 selected KPIs. The 7 Impact Metrics are Emissions Reduced Avoided, Energy Savings,
Renewable Energy Generated, Capacity of Renewable Energy Plants Constructed or
Rehabilitated, Number of People Benefited, Number of Students Reached, Jobs Created and/or
Retained.
The 7 Impact Metrics were selected based on the breakdown of Impact Bonds with the mostcommonly reported quantitative impact metric. At this stage the total impact values are represented
in units specific to the impact metric and are representative of the entire Impact Bond’s contribution
and weighted by the GPIF holding.

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Exhibit 12: Total Impact for Impact Bonds with Reported KPIs for GPIF Holdings (Latest
Year & Cumulative)13
Latest Year14
Impact MetricImpactAnnual GHG Emissions Reduced
AvoidedCumulative15

Impact(incl Estimates)16

ImpactUnit

5,238,192

8,291,327

29,287,757

tCO2e

870,179

964,066

3,418,613

MWhAnnual Renewable Energy
Generation

4,209,676

6,746,261

15,330,172

MWhCapacity of Renewable Energy
Plants Constructed or Rehabilitated

38,989,228

53,198,394

335,220,952

MWhNumber of People Benefited

17,481,390-

76,944,833

PeopleNumber of Students Reached1,581,079-

8,567,689

Students

Jobs Created and/or Retained

195,227-

904,525

Jobs

Annual Energy Savings

7.2

Impact Metric Results

7.2.1

Annual GHG Emissions Reduced Avoided Types of Projects

Across the 691bonds that had reported Impact Metrics in the GPIF universe, the majority (450)
were reporting on Environmentally themed impacts. There were a further 139 bonds which
reported on a combination of Environmental and Socially themed impacts. The measurement of areduction in Annual GHG Emissions was the most commonly reported metric and when looking at
the impacts per US $1000 invested, resulted in a contributed reduction of 838 tonnes of CO2 (orequivalent) emissions. If the weighting of the GPIF holdings is then taken into consideration, thecontribution is a reduction of over 5.2 million tonnes of CO2 (or equivalent) emissions.
For the bonds which had not reported an Impact Metric, the potential impact contributions forenvironmental metrics were calculated using an estimation model which looked at thecategorisation of bonds defined by a combination of type of impact, type of issuer and region. For
the CO2 (or equivalent) emissions reduction metrics, this brought a further 251 bonds into scopeand increased the potential contribution to CO2 emissions reduction for this year to almost 8.3
million tonnes.
7.2.2

Annual Energy Savings

Looking at the same universe of bonds which have reported an energy saving impact metric, per$1000 invested a saving of 39 MWh could be contributed. This, weighted by the GPIF holdings,

13

Per GPIF Holding (Latest Year of holding)
Refer to section 6.4.1 for the methodology
15
Refer to section 6.4.2 for the methodology
16
Only Green or “Environmental” bonds have been selected to complete estimates. Refer to page 14
for further information on Estimates and Estimate Methodology.
14

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results in an annual saving for this year of 870,179 MWh. A further 107 bonds were included in thecalculations when estimates were applied to non-reporting bonds and achieving a contributed
annual saving of 964,066 MWh for this year.
7.2.3

Annual Renewable Energy Generation

Again, for the same universe of bonds with a renewable energy generation metric, per US $1000
invested, 807 MWh of energy was generated and weighted by the GPIF holdings is over 4.2 million
MWh of energy. With an additional 161 bonds included in the calculations based on estimates ofcontributed energy generation, the total rises to 6,746,261 MWh generated.
7.2.4

Capacity of Renewable Energy Plants Constructed or Rehabilitated

The contribution towards an increase in the capacity of renewable energy generation facilities per
US $1000 invested is 846 MWh for the GPIF portfolio based on reported metrics. This value,
weighted by the GPIF holding comes to nearly 39 million MWh of energy production capacity. With
the inclusion of a further 148 bonds for which impact contributions were estimated, this increases
to 53,198,394 MWh.
7.2.5

Number of People Benefited17

When looking at the social metrics which are reported, these are present for 102 bonds in the GPIF
universe where exclusively social themed metrics are reported, and for a further 139 where a
combination of social and environmentally themed metrics are present. The most commonlyreported social metric was number of people benefited by the project or activity. Per US $1000
invested, 454 people were benefited and weighted by the GPIF holding, this becomes 17,481,390
people. It was not possible to estimate impacts for social metrics for the purposes of this report.
7.2.6

Number of Students ReachedThe social bonds held by GPIF also contribute towards the benefiting of students and whencalculating the contribution towards student benefits per US $1000 invested, 51 students arehelped. This, weighted by the GPIF holdings in socially-themed bonds becomes 1,581,079
students reached.
7.2.7

Number of Jobs Created and/or Retained

The final social metric assessed in the analysis of the GPIF universe, is the number of jobs createdor retained. Per US $1000 invested, the aggregate impact is 7 jobs across the bonds invested.
However, when weighted by the GPIF holdings in these securities, the number is 195,227.

7.3

Impact Metric Distribution per US $100,000 Invested (Latest Year)The Impact Metric Distribution charts (Impact Metric per US $100,000 invested) below show the
distribution of investment per bond for each Impact Metric per US $100,000 invested. For example,
the mean tCO2e reduced (Annual GHG Emission Reduced Avoided) for every US $100,000
invested is 198.58 tCO2e. This is based on the latest reporting year methodology.
The distribution graphs represent the reported impact metrics only and not any estimated impacts
from our analysis. Impact Metric per $100,000 Invested was used as the multiple, instead of per$1000, so that the distribution is easier to read.

17

The coverage of the ‘Number of People Benefited’ are impact bonds that are mapped to ‘Social' or‘Environmental + Social’ high-level categories.
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7.3.1

Annual GHG Emissions Reduced Avoided Types of Projects

Exhibit 13: Distribution of GHG Emissions Reduced or Avoided per $100,000 Invested

Number of Bonds (ISINs)

250
200
150
100
50
-

tCO2e/$100,000

The median GHG Emissions Reductions or Avoided from investments in the GPIF portfolio is17.71MWh per US $100,000 invested, however this number is considerably below the average of
198.58 due to a small number of bonds with very high impact results whose issuers are primarily
in the Utilities sector. Whilst there are 22 bonds within 20% of the median impact contribution, there
are 71 bonds offering a significant contribution towards positive impacts in GHG reduction terms
beyond the average impact.
7.3.2

Annual Energy Savings

Exhibit 14: Distribution of Annual Energy Savings per $100,000 Invested

Number of Bonds (ISINs)

100
80
60
40
20
0

MWh/$100,000

Median Renewable Energy Savings from projects funded is 7.79 MWh per US $100,000 invested.
There were far fewer extreme outliers within this Impact Metric category and so the difference
between the mean of 19.67 and median is not so great as for GHG Emissions Reductions. Impact
was not concentrated around the median, but rather distributed from very modest contributions per
US $100,000 of 0.001 MWh to highly contributing bonds with 396 MWh per US $100,000. Thoseat the top end of the distribution were commonly issued by Supranational issuers where bonds arepart of a large issuance programme contributing to huge international projects with big impacts.

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7.3.3

Annual Renewable Energy Generation

Exhibit 15: Distribution of Renewable Energy Generation per $100,000 Invested

Number of Bonds (ISINs)

140
120
100
80
60
40
20
0

MWh/$100,000

The contributed impact towards Renewable Energy Generation is, in the median, 75.15 MWh per
US $100,000 invested, whilst the average is 341.85 MWh. The achievement of bonds in the GPIF
portfolio is broad, spanning from 0.02MWh per US $100,000 invested to 5,250MWh. There are 55
bonds which have contributed positive impacts which are greater than the average value of 341.85
MWh, some of these are issued by financial organisations looking to finance environmental
projects as well as a number of utilities companies.
7.3.4

Capacity of Renewable Energy Plants Constructed or RehabilitatedExhibit 16: Distribution of Capacity of Renewable Energy Plants Constructed or
Rehabilitated per $100,000 Invested

Number of Bonds (ISINs)

120
100
80
60
40
20
0

MWh/$100,000

The capacity of Renewable Energy Plants is resulting in a very broad distribution of results from
0.00001 MWh to 64,440.14 MWh per US $100,000 invested. In this category there are 2 large
outliers which have moved the average significantly to 467.65 MWh per US $100,000 invested,
whereas the median capacity is 0.06 MWh. Both outliers were issued by the European Investment
Bank where they are financing large international investment programmes aligning with the EU's
Green Taxonomy objective for Climate Change Mitigation. Aside from the two EIB Bonds, there
are 149 bonds which have impacts 20% greater than the median.

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7.3.5

Number of People Benefited

Exhibit 17: Distribution of People Benefited per $100,000 Invested

Number of Bonds (ISINs)

20
15
10
5
0

People/$100,000

The distribution of impact results for Average People Benefitted from projects funded by GPIF is
also very broad, leading to a median of 104.37 people per US $100,000 invested but with anaverage of 1,107 people. Eight of the top 25 contributing bonds in terms of people benefitted areissued by the African Development Bank and a further 7 from the International Bank for
Reconstruction and Development.
7.3.6

Number of Students Reached

Exhibit 18: Distribution of Students Reached per $100,000 Invested

Number of Bonds (ISINs)

25
20
15
10
5
0

Students/$100,000

Although there is a larger cohort of bonds which are reporting positive contributions in terms of
Average Number of Students Reached, the distribution of results is narrower with a median benefitof 71.47 students per US $100,000 invested and an average benefit of 82.21 students. The GPIF
portfolio which contributes towards student beneficiaries is 65% issued by the International Bankfor Reconstruction and Development as well as some investments in the Japan Student Services
Organisation but with the largest contributing issuer being Agence Francaise de Development
EPIC.

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7.3.7

Number of Jobs Created and/or Retained

Exhibit 19: Distribution of Jobs Created and/or Retained per $100,000 Invested

Number of Bonds (ISINs)

25
20
15
10
5
0

Jobs/$100,000

The impact results for Jobs Created or Retained are fairly widely distributed spanning from 0.01
jobs created per US $100,000 invested and 112.5 jobs, resulting in an average number of jobs
created per year of 17.2 but a median of 0.78 jobs. Over 40% of the bonds reporting impacts
relating to job creation were issued by Supranational Agencies funding large international
programmes spanning a range of objectives. A further 26% of the bonds are issued byGerman Semi-Government Agencies predominantly funding environmental projects but whichhave the additional impact of creating jobs in the sector.

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7.4

Real World Impact (Latest Year)

Based on the analysis conducted on 591 bonds within the GPIF portfolio, the approximate
total Annual GHG Emissions Reduced or Avoided (5,238,192 tCO2e) is equivalent to thecarbon sequestered by around 6.2 million acres of forests (in one year) which is around11.5 times the size of Tokyo, Japan18. This becomes carbon sequestered by around 9.8 million
acres of forests (in one year) which is 18 times the size of Tokyo, Japan, when the estimatedimpacts (8,291,327 tCO2e) of an additional 251 bonds are included in this calculation.
Based on the analysis conducted on 591 bonds within the GPIF portfolio, the approximate
total Annual Energy Saved (870,179 MWh) is equivalent to the annual energy
consumption of around 208,000 Japanese households19. When estimated impacts for an
additional 107 bonds are included, annual energy consumption (964,067 MWh) increases to theequivalent of around 230,000 Japanese households.
Based on the analysis conducted on 591 bonds within the GPIF portfolio, the approximate
total of Renewable Energy Generated (4,209,676 MWh) is equivalent to the annual
energy consumption of around 1.01 million Japanese households20. With the inclusion ofan additional 161 bonds for which impacts were estimated, Renewable Energy Generated(6,746,261 MWh) is the equivalent of around 1.6 million Japanese households.
Based on the analysis conducted on 591 bonds within the GPIF portfolio, the approximate
total Capacity of Renewable Energy Plants Constructed or Rehabilitated (38,989,235
MWh) is equivalent to the annual energy consumption of around 9.3 million Japanesehouseholds 21 . The Capacity of Renewable Energy Plants (53,198,394 MWh) increases to theequivalent of the annual energy consumption of around 12.7 million Japanese households whenthe estimated impacts of a further 148 bonds are included.
Based on the analysis conducted on 229 bonds within the GPIF portfolio, the approximate
total impact of People Benefited (17,481,390 People) is equivalent to benefitting around
1.2 times the number of residents of Tokyo (as of 2023), Japan22.
Based on the analysis conducted on 229 bonds within the GPIF portfolio, the approximate
total impact of Students Reached (1,581,079 Students) is equivalent to benefitting around
9% of all students in in Japan (as of May 2021)23.
Based on the analysis conducted on 229 bonds within the GPIF portfolio, the approximate
total impact of Jobs Created and/or Retained (195,227 Jobs) is equivalent to around 86%of the total unemployment rate in Tokyo, Japan (as of 2022)24.

18

1 acre of afforestation is 0.85 of tCO2e avoided, https://www.epa.gov/energy/greenhouse-gasequivalencies-calculator
19
https://www.env.go.jp/content/000084571.pdf
20
https://www.env.go.jp/content/000084571.pdf
21
https://www.env.go.jp/content/000084571.pdf
22
https://www.metro.tokyo.lg.jp/tosei/hodohappyo/press/2023/04/26/05.html
23https://www.mext.go.jp/content/20220530-mxt_chousa01-000021527_01.xls
24
https://www.metro.tokyo.lg.jp/tosei/hodohappyo/press/2023/03/29/27.html
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8 Future Developments
The proportion of bonds with decision-useful metrics reported for the GPIF portfolio was not aslarge as might be expected. Although the ICMA first published the Harmonised Framework in 2015,
offering issuers guidance and best practice on impact reporting for labelled bonds, not all issuers
are following this guidance. However, with an increasing focus on the measurement of impact
through such investments, as well as the publication of the EU Green Bond Framework, we hope
to see greater uptake of standardised reporting approaches which will further improve availabilityof decision-useful data for investors.

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9 Conclusions
The analysis presented in this report shows that monetary value of the Impact Contributions from
eligible environmental and social projects from ESG bonds in the GPIF portfolio is considerable
across the metrics analysed. When considering the metric tonnes of CO2 (or equivalents) avoided
or saved over a year, if those emissions had to be offset under a compliance market such as the
EU Emissions Trading Scheme, the cost of a tonne of carbon at the Daily Future Rate at close ofbusiness on 30th June 2023 is €87.51 25 (¥13,783.26) 26, meaning the cost to offset 8,291,327
tonnes of carbon would be approximately ¥100 billion.
When further analysing the energy usage saving, to put the GPIF contribution to energy savings
into a monetary context; with the average Japanese household consisting of 2.24 people27 and theaverage Japanese utility bill for a house with that number of occupants being ¥141,23428, theequivalent utility costs for 230,914 households would be approximately ¥32.6 billion.
Moving onto the contribution to energy generation projects, based on the average cost in Japan of¥35.764 per MWh29, the energy generated, if it was all in Japan, would be worth around ¥200
million to Japanese consumers. Similarly, the value of the energy production capacity added could
be approximately ¥1.9 billion to Japanese consumers if it was all generated and consumed inJapan.
The metric capturing the number of people benefited by a project is broad and captures a wide
range of means to benefit people and so, performing a deeper analysis of those values is notmeaningful without additional detail which was not available for the purposes of this report.
The nature of the benefit to students is also not completely transparent in the metric disclosure
from issuers, however a few ways in which they could be benefited include tuition fees or
accommodation costs. The admission fees to Tokyo university are ¥485,900 30 . If 1.5 million
students were helped with their tuition fees for a year, the value could be around ¥700 billion. The
typical monthly cost for student accommodation at a university is ¥11,900 a month and so thevalue of helping 1.5 million students with their accommodation costs could be approximately ¥18
billion per month.
With the average monthly salary in Tokyo as of May 2023 being ¥574,000 per month31 the valueof creating 195,227 jobs if they were in and around Tokyo could be around ¥1 trillion in salaries
going back into the community.

25

Source: https://www.theice.com/products/18709519/EUA-Daily-Future/data?marketId=400431
FX Rate for EUR/JPY taken 30/06/23. Source: https://www.google.com/finance/quote/EURJPY?sa=X&ved=2ahUKEwiMr_SIwuv_AhVTGVkFHUy9CIkQmY0JegQICRAc
27
Source: https://www.globaldata.com/data-insights/macroeconomic/number-of-households-in-japan2096153/#:~:text=Japan%20had%20an%20average%20household,2021%2C%20between%202010%20and%202021
28
https://www.stat.go.jp/data/kakei/sokuhou/tsuki/index.html#nen?page=1&layout=datalist&toukei=002
00561&tstat=000000330001&cycle=7&year=20190&month=0&tclass1=000000330001&tclass2=0000
00330004&tclass3=000000330005&result_back=1
29
Averaged to account for different costs per usage banding. Source:
https://www.tepco.co.jp/ep/private/plan/standard/kanto/index-j.html
30
https://www.timeshighereducation.com/student/advice/cost-studying-university-japan
31
https://www.timedoctor.com/blog/average-salary-injapan/#:~:text=The%20average%20salary%20in%20Japan%20is%206%2C170%2C000%20Japanes
e%20Yen%20(JPY,exchange%20rate%20in%20May%202023)
26

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10 Appendix
10.1 GHG Emissions Scopes
The GHG Protocol Corporate Standard classifies a company’s GHG emissions into three‘Scopes’.
oScope 1 emissions are direct emissions from owned or controlled sources. Mobile emissions,process emissions and fugitive emissions are counted as Scope 1 if the company owns orcontrols the activities or equipment associated with the emissions.

oScope 2 emissions are indirect emissions from the generation of purchased energy. The
emissions resulting from the production of grid electricity are accounted for under Scope 2.

oScope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value
chain of the reporting company, including both upstream and downstream emissions.

Source: ICE, Greenhouse Gas Protocol

ICE Impact Bond Indicator ~Analysis of GPIF Portfolio~ | July 202330

10.2 Frameworks
Framework

Overview

SourceCBIThe Climate Bonds Standard and Certification Scheme is alabelling scheme for bonds and loans. Rigorous scientific criteria
ensure that bonds and loans with Certification, are consistent
with the 1.5 ° C warming limit in the Paris Agreement. The
Scheme is used globally by bond issuers, governments,
investors and the financial markets to prioritise investments
which genuinely contribute to addressing climate change.

https://www.clima
tebonds.net/standard/thestandard

EU
Taxonomy

Ahead of the launch of the EU Green Bond Standard, issuers
have been reporting their funded projects in terms of alignment
with the EU Taxonomy. This alignment approach will beformalised in the EU Green Bond Standard. On 28 February
2023, the Council of the European Union and the European
Parliament announced (the Announcement) that they hadreached a provisional agreement on the creation of European
green bonds (EuGB). The EuGB Regulation will lay thefoundation for a common framework of rules regarding the useof the EuGB designation for bonds that pursue environmentally
sustainable objectives as defined by the EU Taxonomy
Regulation. It also sets up a system for registering andsupervising companies that act as external reviewers for green
bonds aligned with the EuGB framework.

-

ICMA
Green
Bond

Green bonds enable capital-raising and investment for new andexisting projects with environmental benefits. The Green Bond
Principles (GBP) seek to support issuers in financing
environmentally sound and sustainable projects that foster a
net-zero emissions economy and protect the environment. The
GBP, updated as of June 2021, are voluntary process guidelinesthat recommend transparency and disclosure and promote
integrity in the development of the Green Bond market byclarifying the approach for issuance of a Green Bond. The GBP
recommend a clear process and disclosure for issuers, whichinvestors, banks, underwriters, arrangers, placement agentsand others may use to understand the characteristics of any
given Green Bondhttps://www.icma
group.org/sustain
able-finance/theprinciplesguidelines-andhandbooks/green-bond-principlesgbp/

Social bonds are use of proceeds bonds that raise funds for new
and existing projects with positive social outcomes. The Social
Bond Principles (SBP) seek to support issuers in financing
socially sound and sustainable projects that achieve greatersocial benefits. SBP-aligned issuance should provide
transparent social credentials alongside an investment
opportunity. The SBP, updated as of June 2023, are voluntary
process guidelines that recommend transparency anddisclosure and promote integrity in the development of theSocial Bond market by clarifying the approach for issuance of a
Social Bond.

https://www.icma
group.org/sustain
able-finance/theprinciplesguidelines-andhandbooks/social-bond-principlessbp/

ICMA
SocialBond––

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ICMA
–
Sustainabil
ity Bond

Sustainability bonds are bonds where the proceeds will be
exclusively applied to finance or re-finance a combination ofboth green and social projects. The Sustainability Bond
Guidelines (SBG), updated as of June 2021, confirm therelevance of the Principles in this context and facilitate theapplication of their guidance on transparency and disclosure to
the sustainability bond market. The common four corecomponents of the Principles and their recommendations on theuse of external reviews and impact reporting therefore also
apply to sustainability bonds.

https://www.icma
group.org/sustain
able-finance/theprinciplesguidelines-andhandbooks/sustai
nability-bondguidelines-sbg/

LMA

Originally published in March 2018, the Green Loan Principles
provide a high-level framework of market standards andguidelines allowing for consistent methodology to be applied
across the wholesale green loan market. The principles
constitute voluntary recommended guidelines to be applied toany form of loan instrument that may be categorised as “green”.
In December 2018, The LMA, together with the APLMA and
LSTA, published an extended iteration of the Green Loan
Principles (GLP), providing a more in-depth explanation as to
how the GLP can be applied to revolving credit facilities whilst
maintaining the integrity of the green loan product. In April 2021,
The LMA, APLMA and LSTA announced the publication of theSocial Loan Principles (SLP). The SLP aim to create a high-level
framework of market standards and guidelines, providing aconsistent methodology for use across the social loan market,
whilst allowing the loan product to retain its flexibility andpreserving the integrity of the social loan market while itdevelops. The SLP build on and refer to the Social Bond
Principles (SBP) administered by the International CapitalMarkets Association (ICMA), with a view to promoting
consistency across financial markets.

https://www.lma.eu.com/newspublications/pressreleases?id=160&
search_str=green%20loan%20princ
iples
https://www.lma.eu.com/newspublications/pressreleases?id=187

Other‘Other’ is the consolidation of a number of other frameworks
which exist for issuers

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10.3 Additional Metrics
During the analysis of the GPIF Impact Bond universe, there were 50 Impact Metrics identified asreported by issuers of the invested bonds, including those falling into the ‘Other - non-standard’category (see 4.2.4 above). Whilst 7 key Metrics were selected for deeper analysis as previously
explained, the contribution that bonds in the GPIF portfolio make in these 50 categories is shownin the following table (NB: this is not weighted by GPIF holding, and some may be applicable tothe pool of bonds):
Metric
AREA UNDERCONSERVATION OR
PRESERVATIONAREA UNDER CERTIFIEDLAND MANAGEMENTNUMBER OF CLEAN
VEHICLES DEPLOYEDNUMBER OF ELECTRIC
VEHICLE CHARGINGSTATIONS
TRAIN LINES BICYCLE
LANES BUS CORRIDORSETC BUILD OR
UPGRADED
PASSENGERKILOMETRES IN NEW
MEANS OFTRANSPORTATIONREDUCTION OF AIR
POLLUTANTS VS LOCALBASELINE
TRANSMISSION AND
DISTRIBUTION LINESBUILT OR UPGRADEDESTIMATE REDUCTION IN
FUEL CONSUMPTIONANNUAL GHG EMISSIONSREDUCED AVOIDED PER
VEHICLEANNUAL GHG EMISSIONSREDUCED AVOIDEDANNUAL GHG EMISSIONSREDUCED AVOIDEDINTENSITY
ANNUAL GHG EMISSIONSREDUCED AVOIDED
LIFETIME
ANNUAL ENERGYSAVINGS
NUMBER OF SMART
METERS DEPLOYEDANNUAL ENERGYAVOIDED PER GROSSBUILDING AREA
NUMBER OF GREEN
BUILDINGS WITH
CERTIFICATION
GHG EMISSIONSREDUCED AVOIDED PER
SQMGrouping

Bond Contribution
Value

Unit ofMeasureBiodiversity and Sustainable Land
Use

901,849,560

HA

Biodiversity and Sustainable Land
Use

19,769,064,245

HA

Clean Transportation

421,309

VehiclesClean Transportation

57,930Stations

Clean Transportation

1,721

KM

Clean Transportation

34,789,333,558

KM

Clean Transportation

721

TonnesClean Transportation

78,778KM

Clean Transportation-

KM Driven

Clean Transportation

164

tCO2e

Emission Reduction

58,546,795,373

tCO2e

Emission Reduction

2,106,807,342

tCO2e BY
CUR MN

Emission Reduction

132,936,569

tCO2e

Energy Efficiency

49,992,518,175

MWhEnergy Efficiency

55,016

MetersGreen Building

10,427

KWh by M2

Green Building

198

Buildings

Green Building

277

TCO2 BY M2

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ENERGY SAVINGS PER
SQMGREEN FLOOR SPACENUMBER OF GREEN
BUILDINGSNUMBER OF HOUSE
RECEIVED SOLAR PANELBREEAM CERTIFICATIONGreen Building-

KWh by M2

Green Building

17,515,481

M2Green Building

284,003

Buildings

Green Building

360,000

HousesGreen Building

Non-numeric Output-

LEED CERTIFICATIONGreen Building

Non-numeric Output-

BUILDING CERTIFICATIONGreen Building

Non-numeric Output-

Renewable

1,630,496,471

MWhRenewable

1,291,056,668

MWhRenewable

5,532

Projects

Water and Waste Management

660,812,600

M3

ANNUAL RENEWABLE
ENERGY GENERATIONCAPACITY OF
RENEWABLE ENERGY
PLANTS CONSTRUCTEDOR REHABILITATEDNUMBER OF RENEWABLE
PROJECTSANNUAL WATER SAVINGSANNUAL AMOUNT OFWASTE PREVENTEDMINIMISED REUSED OR
RECYCLED
ANNUAL AMOUNT OFWASTEWATER TREATED
REUSED OR AVOIDEDANNUAL ABSOLUTEGROSS WATER USE
ANNUAL AMOUNT OFWASTE COLLECTEDTREATED COMPOSTEDOR DISPOSED OF
PIPING AND CONDUITBUILD OR UPGRADEDINCREASE IN SEWAGESYSNUMBER OF PEOPLE
BENEFITEDNUMBER OF STUDENTS
REACHEDJOBS CREATED AND ORRETAINEDNUMBER OF PEOPLEPROVIDED HOUSINGNUMBER OF INDIVIDUALSFAMILIES BENEFITINGFROM SUBSIDIZEDHOUSINGNUMBER OF LOANS
NUMBER OF LOANS TO
SMES AND OR
MICROENTERPRISESNUMBER OF PATIENTSREACHEDNUMBER OF HOSPITALSAND OTHERHEALTHCARE FACILITIESBUILT UPGRADE

Water and Waste Management

8,634,103

TonnesWater and Waste Management

566,058,232

M3

Water and Waste Management

131,180,275

M3

Water and Waste Management

12,583,867

TonnesWater and Waste Management

3,759

KM

Water and Waste Management

780

TonnesSocial2,660,172,547

PeopleSocial

7,015,771,975

Students

Social21,257,153

Jobs

Social10,135,000

PeopleSocial - Other

12,000,959

Families

Social - Other

1,627,193

Loans

Social - Other

241,624

Loans

Social - Other

1,511,620,904

Patients

Social - Other

72

Facilities

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NUMBER OF PLACES AND
BED IN HEALTHCAREFACILITYNUMBER OF SCHOOLSAVERAGE DISPOSABLE
INCOME OF PEOPLEPROVIDED HOUSINGNUMBER OF DWELLINGSOTHER - NON-STANDARD

Social - Other

737,684

Beds

Social - Other-

Schools

Social - Other

131,315

US$

Social - Other

16,600,229
Non-comparable
OutputHousesOther

ICE Impact Bond Indicator ~Analysis of GPIF Portfolio~ | July 2023-

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