In this weekly roundup, we explore the latest trends and developments in sustainable investment and finance.
Sustainability-Linked Bonds (SLB)
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.
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.
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.
Global green bond issues reached a high of $351 billion in first six months of 2023, according to analysis from Linklaters. The increase in volume comes in the middle of a rapidly evolving regulatory landscape.
India's JSW Cement – part of the $22 billion JSW Group (NSE:JSWSTEEL) – has signed a Sustainability Linked Loan (SLL) agreement to raise $50 million (Rs 414 crore) from BNP Paribas Singapore (PAR:BNP).
The International Capital Market Association (ICMA) and the Luxembourg Stock Exchange (LuxSE) have announced the launch of ICMA’s new database dedicated to sustainable bond data, intended to provide deeper insight into the market.
Green bonds continue to dominate the global sustainable bond landscape, which continues to grow in size and diversity.