Sustainable and Responsible Capital Markets 2019
The European Union’s Sustainable Finance Action Plan is changing the legal and cultural environment of capital markets. It is bringing excitement — but also fear. It aims at systemic change, but has many opt-outs. And just when the Plan is getting going, another one arrives — the European Green Deal. As Jon Hay reports, that may be the one the market really needs.
The public is increasingly conscious of environmental challenges facing the ocean economy, and the capital markets are taking note. Industries using the oceans are numerous and fragmented, making allocating money in a sustainable way challenging. But some routes are open for investors looking to improve activities involving plastics, shipping and fishing. Jasper Cox reports.
It has been a long time since a brand new product appeared in the loan market — apart from new ways for private equity firms to erode covenants. But in April 2017, two deals arrived in a single week that have changed the loan market. Sustainability-linked loans offer a structured way to tie pricing to ESG performance, on a whole company basis. One day, they might change the bond market too. Jon Hay reports
Fairtrade foods are popular with ethical consumers. For investors, a sustainability bond based on the same is not so straightforward. Nevertheless, the UK’s Co-operative Group has joined the small group of companies stretching the labelled bond market towards improving supply chains. Jon Hay reports
Green bonds have hardly penetrated the manufacturing sector, partly because making companies’ operations sustainable is not easy. Any green bonds they issue will be similarly complex. As Koninklijke Philips’s debut showed, this asks a lot of the issuer — and the investors. Jon Hay reports
The fast-developing green, social and sustainable bond markets have moved on from obsessing about the volume of issuance and the basics of how to issue the bonds, to new challenges. Above all, the SRI bond market is about communication — between issuers and investors, assisted by investment banks; between issuers and society at large; and, increasingly, regulators are joining the conversation.
Commercial director of events: Daniel Elton
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Publisher, special projects: Ashley Hofmann
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