Sustainable and Responsible Capital Markets 2018

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  • Impact joins risk and reward as third axis of ESG investing

    Environmental, social and governance investors have done a fine job of making their approach accepted and now mainstream in a money-driven industry. Along the way, they started saying it was all pragmatic, not about principles. That was a fiction, and under the pressure of climate change, it is being replaced with a more rounded philosophy. Jon Hay reports.

  • Silence is not golden: bond investors try to find their voices

    Many bond investors now say they engage with borrowers on ESG issues. Companies are noticing, and a virtuous circle is beginning to turn. But much of the conversation is still very gentle and diffuse, and not concentrated at the point of capital raising. As Jon Hay reports, more ambitious engagements to change whole industries lie in the future.

  • SSAs lead SRI bond market through transition phase

    Public sector borrowers were the pioneers of the green and socially responsible themed bond market. Now that the sector is burgeoning, they are still leading the way. From sovereign issuers bringing green bonds of hitherto unseen size, to supranationals structuring catastrophe bonds to protect poor countries, the supranational, sovereign and agency market has had a busy 12 months. Borrowers have also brought a range of new social and sustainability bonds to market. Others are searching for more assets to add to their SRI funding mix, as well as branching out into new currencies for the first time and exploring the possible issuance of tailor-made, privately placed notes and when they are not bringing deals to market, issuers are driving forward new advances in impact reporting. Meanwhile, the question of where SRI bonds should price relative to conventional curves remains a central question for the future of the sector. GlobalCapital brought together several funding officials at the biggest SRI issuers in the public sector to discuss these issues with investment banks and socially responsible investors.

  • Sustainable Development Goals show their worth for investors

    The UN’s Sustainable Development Goals (SDGs) were not specifically designed for finance, something that perhaps helps to explain their popularity among responsible investors, institutions and borrowers. But this does not mean that factoring them into investing decisions is easy, reports Jasper Cox.

  • Where are the Asian investors?

    Asia’s green bond investor base is bigger than many bankers think. However, it is still not big enough. Matthew Thomas reports.

  • Trump: an unlikely catalyst for US impact investing

    Enthusiasm for socially and environmentally responsible investing in the US has long lagged the immense size and influence of its financial sector. But under the Trump presidency, that may be changing. David Bell reports.

  • Green-minded banks grapple with climate change

    Markets are not prepared for climate change, which is expected to have severe economic consequences. Event risk, leading to credit risk and political action, will spur dramatic change, that could create a new low carbon economy. Climate change mitigation will eventually come to bear on all aspects of society, in the form of regulatory and fiscal incentives and disincentives. Having a green and sustainable action plan is therefore likely to become core to the strategy of every financial institution.

  • Green loans grow as firms find business and finance harmony

    The syndicated loan market is not renowned as a crucible of financial innovation, but with a new rash of green corporate financings it has left the bond market struggling to catch up. The deals offer borrowers a financial incentive to improve the company’s whole sustainability performance. Silas Brown reports.

  • Corporates wake up to social bond potential

    Advances in defining the scope and measuring the impact of social and sustainable bonds have market participants dreaming of a boom in issuance. But involvement from private sector corporates is going to be crucial if the capital markets are going to realise their enormous potential for financing social change. Tyler Davies reports.

  • Sustainability begins to permeate corporate finance

    The touch points between the corporate finance world and environmental and social consciousness are proliferating. First came responsible equity investing, later green bonds — now this is an evolving, complex interaction.

  • People power in finance could help quest for sustainability

    The long growth of responsible investing has happened in a voluntary way, with practices and standards defined by the market. Now, the European Union is taking the controls, with an Action Plan containing a host of measures. It is a leap forward towards sustainability, but more will be needed to get all the way there. Jon Hay reports.

  • Grading goodness: judging shades in the SRI market

    The rapid growth of sustainable finance, particularly in fixed income, has meant standards and sustainability reviews have proliferated, leaving baffled investors to assess their assets against an ever-expanding list of acronyms. Regulators are preparing to wade in with their own definitions, but some fear this will stifle the market’s progress. Owen Sanderson reports.

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