June 27, 2024


BCI looks for opportunities to invest in the fast-growing market of sustainable bonds. These use-of-proceeds bonds — labelled green, social, or sustainability — offer clients investment returns and exposure to positive sustainability outcomes, including climate mitigation strategies. Through primary market participation, our investments support leading issuers in directing funds toward tangible environmental and social solutions.

Overachieving our estimated $5 billion cumulative participation by 2025, BCI’s total historical participation in sustainable bonds reached more than $5.23 billion as of March 31, 2024. We’ve supported a total of 63 issuing entities through 113 new issues since 2013 and invested in 21 new issuances valued at just over $1 billion in this fiscal year alone.

Anne-Marie Gagnon, Director of ESG, sits on the board of the Canadian Bond Investors’ Association (CBIA) and chairs the CBIA’s ESG Committee. BCI is also a member of the International Capital Market Association (ICMA) Green and Social Bond Principles, currently its only Canadian investor member. We promote the ICMA Green and Social Bond Principles to support market growth, encouraging qualified issuers to consider sustainable bonds as a financing mechanism within their sustainability strategies.

Engaging on Standards
Critical to improving the product offering for bond investors, we continue to engage underwriting banks and issuers to align with investors’ interests and expectations for improved transparency and rigour in accounting and reporting on sustainable finance targets. In addition, we actively support engagements and hold regular dialogue with market participants involved in the structuring and marketing of sustainable and labelled bonds.

BCI is a member of the ICMA Sustainability-Linked Bond (SLB) Working Group, and of the Sustainability-Linked Loans (SLL) Refinancing Instruments Taskforce. Sustainability-linked bonds and loans have general purpose use of proceeds with financial or structural components tied to achieving ESG targets. We disagree with the systematic characterization of sustainability-linked financing as sustainable finance by the underwriting community. BCI is a member of these efforts to ensure investors’ views are expressed and considered. We advocate to significantly strengthen the instruments’ shortcomings including the ambition of targets and the materiality of penalties associated with missed targets to deliver their intended purpose of incentivizing companies to achieve sustainability targets.

“Our engagement with bank dealers and issuing companies on sustainable bonds shows how the invest and influence pillars of our ESG strategy intersect. Influencing the behaviour of market participants gives us better options to invest in attractive opportunities, while actively investing gives us a stronger voice at the table.”
– Anne-Marie Gagnon, Director, ESG

Participation Across Issuers and Industries
BCI participates in the sustainable bond market by investing in a diverse universe of issuers, including sovereign, supranational and agency (SSA) issuers — such as all level of government organizations and development banks— and corporate investment grade and high-yield issuers.

Canadian-dollar-denominated SSA bonds represent over 40 per cent of our total historical participation, with issuances by development banks representing under 10 per cent, and Canadian governments and agencies such as Public Sector Entities reflecting over 30 per cent of total historical participation. Examples from our fiscal year, ending March 31, 2024, include:

  • $450 million invested in green and social bonds from Canadian federal, provincial, and municipal governments.
  • $100 million invested in social and sustainability bonds issued by development banks.


Canadian-dollar-denominated corporate issuances represent over 30 per cent of our historical participation. Examples from this fiscal year include:

  • $125 million+ invested in Canadian utilities issuing green and sustainability bonds.
  • $100 million+ invested in Canadian real estate and financial institutions issuing green and sustainability bonds.

U.S. corporate issuance represents over 25 per cent of our historical participation, including about 15 per cent from financial institutions and just under 10 per cent from industrials. This fiscal year, we observed reduced supply in the US market, especially from banks compared to previous years. Investment examples from this fiscal year include:

  • $40 million+ invested in industrial companies’ green bonds.

Use of Proceeds

Historically, BCI has subscribed to 113 sustainable bonds, representing over $5.23 billion in initial participation in support of 63 issuing entities1. Some examples of our 2023-2024 investments are included in the table below.

Type Region Issuer Issuer Type Issuance Value Year Use of Proceeds
Green Canada Government of Canada Federal Government $4 billion 2024 The Government of Canada’s second green bond used to finance programs including incentives for the Zero Emissions Vehicles Program, the Smart Renewables and Electrification Pathways Program and the Low Carbon Economy Fund.
The first sovereign green bond to include nuclear energy as an eligible expenditure, with a maximum of 10% earmarked to this category.
Sustainability Canada Fédération des caisses Desjardins du Québec Corporate $500 million 2023 Green: Finance renewable energy, green buildings, and clean transportation.

Social: Finance affordable housing and employment generation including through SME financing and microfinance.

Green U.S. (for Europe-based issuer) ZF North America Capital (for ZF Friedrichshafen AG) Corporate US$600 million
US$600 million
2023
2023
Finance clean transportation, renewable energy, pollution prevention & control, and energy efficiency. Furthering ZF’s mission to electrify passenger cars and commercial vehicles. The company has set a 2030 emission reduction target validated by the Science Based Targets initiative.
Sustainability & Green Canada Hydro One Corporate $450 million (sustainability)
$425 million (green)
$400 million (green)
$550 million (green)
$250 million (reopening; sustainability)
2023
2023
2023
2024
2024
Green: Finance clean energy and energy efficiency projects to achieve the organization’s emission reduction targets.

Social: Socio-economic advancement of Indigenous peoples in line with the issuer’s Indigenous relations and procurement programs.

Green Canada Toronto-Dominion Bank Corporate $500 million
US$500 million
2014
2023
Finance renewable energy, energy efficiency, clean transportation, and green buildings.
Our support of financial institutions’ green bond programs carries multiplier decarbonization effects such as through the banks’ lending activities on client companies.
Green U.S. Verizon Communications Corporate US$1 billion
US$1 billion
US$1 billion
2021
2022
2024
Finance renewable energy purchase agreements across five U.S. states covering nearly 900MW of new renewable energy generating capacity – 53% from solar and 47% from wind.

Verizon is one of the largest green bond issuers in the US.

Green International (Europe) (for U.S. based issuer) Alcoa Nederland Holding (for Alcoa Corporation) Corporate US$750 million 2024 Finance circular economy, pollution prevention & control, renewable energy and water and wastewater management.

The Transition Pathway Initiative recognizes Alcoa’s short- and long-term decarbonization strategies as aligned with a 1.5-degree scenario.

1At March 31, 2024