What’s Happening in Sustainable Finance: ESG Market Continues Rapid Growth, Climate Risks Top WEF List, and More

Episode Summary Hosts Nicholas Gandolfo, Director, Corporate Solutions Aditi Bhatia, Regional Sales Manager, Corporate Solutions In this episode, hosts Nick and Aditi discuss notable trends and deals in sustainable finance – from rapid market growth, to increasing diversification of products, new taxonomies, sovereign green bonds and sustainability-linked bonds, impact accounting and reporting, and much more. Nick also tackles audience questions, offering some valuable insight on group frameworks and Sustainalytics’ approach to supporting transition finance. Rapid Growth in Sustainable Finance 2021 saw incredible growth in sustainable finance and ESG assets under management (AUM) are projected to reach US$50 trillion by 2025 and make up one-third of global AUM. Sustainable bonds already made up 10% of global debt issued in 2021, with US$1 trillion issued for the first time and a 40% increase over 2020. And 2022 is showing no signs of slowing down, with a hot start to the year and good momentum looking forward. World Economic Fund Risk Report 2022 Of the WEF’s top ten global risks by severity, five are environmental issues and the top three directly relate to climate change. View the report here. Maybe it’s no surprise that this theme is carried forward from the previous risk report, but it highlights the continued importance of funding for projects that address climate risk. Download Our New eBook Getting Started With ESG: What Every Company Needs to Know As more and more companies are thinking about incorporating ESG considerations into their strategies, Sustainalytics Corporate Solutions wants to ensure they start off on the right foot. Download our practical guide to starting a corporate ESG strategy. Discover key issues that could affect your company, the benefits of action, and the risks of inaction. Key Moments Market news 02:17 Hot start to the year: looking for $1tn ESG investment in 2022 03:31 Big year for taxonomies? ASEAN, Korea, Indonesia, plus EU changes 03:58 WEF Risk Report: top risks climate-related 05:10 ESG risk ratings scrutiny – usefulness and robustness 05:45 Fashion industry financing decarbonization and scope 3 emissions 06:20 Impact accounting 07:15 Nuclear & Gas and the EU Taxonomy 07:52 John Holland Sustainability Linked Bank Guarantee (Australia) 08:32 COVID recovery and Build Back Better 09:02 CBI report: Thailand infrastructure 09:25 World Bank report: sovereign SLB KPIs 09:51 IEA report: digitization as enabler for transition 10:20 Environmental Finance report: Green Bond Impact Reporting Green bonds overview 11:25 Sovereigns: Egypt, Cyprus, Qatar, Denmark, Uruguay 12:00 Banks 13:40 Lots of activity and diversification in India 14:50 Social bonds to fund affordable housing, microfinance, employment Green loans overview 16:15 Renewables 16:40 Property 17:05 Industrial machinery: sustainable water management SLB overview 18:10 Coal terminals: scope 3 emissions and transition plans 19:02 Construction: reducing scope 1 and 2 carbon emissions 19:38 Private equity: coverage approach, science-based targets 20:40 Telecom: scope 1, 2 and 3 reductions 22:55 Chemicals: scope 1 and 2, recycling, SBT, Transition Pathway Initiative, IEA Listener questions 24:20 Q: Can a group framework cover all the entities in the group? 26:13 Q: How does Sustainalytics sign off on transition and what’s our approach? SLLs 29:15 Sector activity: shipping, pulp and paper, finance, property, retail, telecom, rail, IT, manufacturing, chemicals, construction, and more Labeled products overview 32:30 Saudi Arabia: green deposits 32:40 Insurance connected to climate 32:58 Trade finance and solar loans Transition finance overview 33:28 Hydrogen, mining, oil companies, McKinsey report, Japan 34:50 Countries and regulations Links to Select Resources Banking Exchange: Global ESG Assets to Hit $50 Trillion by 2025 Asian Investor: Sustainable Finance Bonds Make Up 10% Of Global Debt Issued in 2021 World Economic Fund: Global Risks Report 2022 Morningstar: ESG Ratings Are Bottom-Line Focused, but Have Broader Impacts Environmental Finance: 'Impact Accounting' Bodies Launch Survey Of Existing Approaches Climate Bonds Initiative: Keeping the Momentum: China Introduces Innovative Labels Into Domestic Market Environmental Finance: Impact report quality deters green bond fund investors Bloomberg: Global Issuers Land in Canada as Nation’s Banks Fund Abroad Sustainalytics SPOs: Danske Bank Group Green Bond Framework Banco do Brasil Sustainable Finance Framework FONPLATA Sustainable Debt Framework Northland Power Green Financing Framework Sumitomo Mitsui Banking Corporation's Green Bond Framework ICG Sustainability-Linked Bond Framework Cellnex Sustainability-Linked Financing Framework Coca-Cola İçecek A.Ş. Sustainability-Linked Bond Framework The Central America Bottling Corporation Sustainability-Linked Financing Framework

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