Risk management continues to dominate the discussion around sustainable investment, as the IEA’s prediction that peak oil demand will be hit within the decade changes the dynamic of the investment environment.
The European Securities and Markets Authority (ESMA) has said there is no evidence of a recent greenium for sustainable debt, although there is statistical evidence supporting it historically.
The European Parliament has approved its ‘European Green Bond’ label to be used as a new standard aligned with its Green Taxonomy. This will help to address greenwash concerns and help scale the market by providing investor clarity.
Despite a growing number of green bond and SLB issues alongside new commercial microfinance, concerns are growing about use of proceeds and transparency in green finance, and consistency between targets and behaviour by US banks. Meanwhile the UN calls for more funding for nature while Australia warns of massive economic pain due to climate change.
This week saw the accreditation of the UNDP's National Carbon Registry as a digital public good, investment in reinsurance solutions and ocean conservation in Gabon. While sustainable bonds continue to attract more issuance despite choppy macroeconomic conditions, world leaders are called to honour the commitments made at COP15.
This week saw the green bond market continue to grow, but greater clarity is needed on use of proceeds and standard. Yet another carbon platform launched to build trust in the carbon markets, Chevron is looking at carbon sequestration and Australia took a pension fund to court.
The UK government is in the process of losing its position as a green leader, as Rishi Sunak’s government seems to increasingly believe that rolling back green policies, and the costs they entail, and are key to winning the next election. This is despite analysis that shows that if the UK had implemented its early green policies, energy bills would have been at least £2.5 billion lower when the energy crisis hit.
Moody’s latest sustainable finance quarterly update says that global sustainable bond issuance has the potential to eclipse the initial 2023 forecast of $950 billion, despite challenging markets. It also points out that sustainable bonds now represent 15% of the global bond market.