Free content

Commerzbank bought an investment bank two weeks before Lehman Brothers collapsed, and now counts the German government as a major shareholder. But despite its drawn-out recovery meaning less frequent visits, Commerzbank is now creating funding markets all of its own, writes Tom Porter.

The corporate sector is the big one as far as SRI is concerned. It’s where the most energy and climate-rated improvements can be made and where the most capital will be raised. Corporate leaders see sustainability as a value driver, and investors are beginning to agree. As Jon Hay reports, a wave of green bonds could help companies communicate their credentials to the market.

Established SRI bond issuers such as the World Bank and the International Finance Corporation have emphasised the importance of working with investors on the development of their green programmes, and credit investor feedback with helping them to evolve their issuance, reporting and communications strategy in this field. In this roundtable discussion EuroWeek brought together key SRI investors with borrowers and bankers to explore the issues affecting the buyer base.

In an age in which movements in banks’ share prices are often based on the latest mis-selling scandal, taking financial institutions’ environmental, social and governance credentials into account when picking stocks makes a lot of sense for equity investors. But what about the world of fixed income bank products? Will Caiger-Smith investigates.

India’s growth is falling, inflation is rising and the rupee is plummeting, but IDBI Bank plans to build on its experience of issuing in non-G3 currencies as volatility also continues to rattle US dollar markets, writes Frances Yoon.

Between the shrill denunciations of NGOs and banks’ pious statements on climate change and even human rights, the reality behind the sustainable banking label can be difficult to discern. On balance, though, there is substance as well as spin to banks’ strenuous efforts to appear responsible corporate citizens. Positive community initiatives, less resource-intensive operations and a key role in growing clean energy into a $250bn sector all enhance their scorecards. The big issue now? Banks’ own institutional risk and sustainability, reports Julian Lewis.

There aren’t many bank treasurers that can say the financial crisis of 2008 made their job easier, but Pohjola Bank’s is probably one of them. Its assets are restricted to one of Europe’s most fiscally stable jurisdictions, making it a sought-after credit for an increasingly broad audience, writes Tom Porter.

Under the guide of a new head of funding, UniCredit has made waves in the capital markets this year even as Italy has suffered amid political uncertainty and a scandal-plagued banking sector. Will Caiger-Smith reports on a bank that wants to be bigger than its home country.

Royal Bank of Canada has an enviable array of funding tools at its disposal. Whether in calm or stormy times, the bank seems to always have options in the capital markets. Joe McDevitt finds out more.

The increasing breadth and depth of the SRI investor base has provided new opportunities for individual issuers to fund in the capital markets, but its growth is also sparking innovative instruments with the potential to harness private sector capital for huge social gains. Steve Gilmore reports.

The arrival of the first benchmark-sized green bond in February — a $1bn three year offering from the International Finance Corporation — was a landmark event in the development of the growing market for themed SRI bonds. But plenty of obstacles to growth remain. For green and SRI issuance to really take off, new issuers must be encouraged to bring deals. Another issue that needs to be tackled in this growing market is how a green or SRI bond should be defined, whether issuance should be regulated or rated, and if so, how. EuroWeek met key issuers, bankers and some investors in New York in mid-September to discuss whether 2013 is a turning point, and what new borrowers can learn from the market’s pioneers.

Islamic finance is one of the earliest codes for socially responsible investment and has gained increasing popularity with Muslims and non-Muslims alike. Its selection criteria dovetail well with those of other SRI investor types and finding common ground between these approaches could create a richer, more robust market. Dan Alderson reports.