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Taiwan’s BLF ties US$2.3 billion ESG bond mandate to Bloomberg index

Taiwan pension
By Hui Ching-hoo   
July 30, 2020

Taiwan’s Bureau of Labor Funds (BLF), supervisor of the island’s labour pension funds, has appointed Bloomberg as index provider for its US$2.3 billion global sustainability debt mandate.

The BLF is looking to hire five global managers for the environmental, social and governance (ESG) bond mandate. The tender was opened on July 3.

The mandate will be benchmarked against the Bloomberg Barclays Global Aggregate Corporate USD ex Controversial Industry Index, which screens out industries such as tobacco, alcohol and weapons, Bloomberg says in a statement on July 28.

According to Liu Li-ju, the BLF’s deputy director general, the benchmark “provides performance transparency and ensures our selected fund managers meet socially responsible criteria we set for them”.

“We believe this is the time for institutional investors to consider sustainable investments that support a socially inclusive economic recovery. Pension funds, in particular, play an increasingly important role in guiding long-term capital responsibly and creating meaningful impact by deploying it at scale,” Ms. Liu says in the statement.

Manager selection for the new mandate is expected to be completed by the end of the year.

This is the BLF’s third ESG mandate in three years. It outsourced a $2.4 billion global ESG equity mandate to four international managers in 2017, and hired seven Taiwanese managers for a NT$42 billion ($1.43 billion) domestic ESG equity mandate the following year.

The BLF supervises seven pension and annuity funds with combined assets of NT$4.69 trillion as of May 2020.