Sustainable and Responsible Capital Markets 2016

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  • The race is on: go green or get hot

    The Paris Agreement has set the direction for action to ward off devastating climate change. That should mean investment capital now knows where to go. But big political risks remain: the US might back out, governments could drag their feet. Finance is on the starting blocks — it just needs the track laid out in front of it. Jon Hay reports.

  • Spotting losers and winners before the market does

    The birds do it, the bees do it… Not everyone is doing ESG yet — but the way things are going, they soon will be. Investors argue it’s not taking the moral high ground, just good financial sense. And regulators are starting to agree. Climate change is going to do things to portfolios, and you had better be on the lookout. Jon Hay reports.

  • Green is go as sovereign issuers tipped for next demand surge

    Green bond issuance in 2016 had by the end of August already overtaken the whole year’s total for 2015, setting another record for yearly growth. The magic $100bn of annual volume is still a little way off, but could be boosted by new types of issuers entering the fray. Craig McGlashan reports.

  • SSAs: pioneers of SRI bonds still leading the way

    Supranational and agency issuers were the early adopters of the SRI bond format, creating a market and developing standards for others to follow. While other sectors are enjoying the fruits of those labours, the SSA pioneers are still focused on bringing further innovations — from the development of social bonds to higher reporting standards, to the introduction of the last ‘S’ in the acronym: sovereign issuers. GlobalCapital brought together many of those market leaders, together with bank experts and SRI investors, to discuss the latest innovations and the growth of the market.

  • Bond markets set their sights on $1tr annual target

    At around $700bn, the climate-aligned bond universe is less than 1% of the entire bond market. A goal of growing that to even 10% is a lofty one, but entirely necessary if the world wants to meet its climate goals, writes Graham Bippart.

  • Investors forge new ground in sustainable investment

    With political and regulatory efforts putting sustainable and responsible investing in the spotlight, investors are racing to develop SRI strategies. The market is only just keeping up with the growth in demand, market players tell David Bell.

  • FIG and corporate green bonds are flying, but who’s the pilot?

    The green bond market began with deals from only the world’s top credits. But now, companies and financial institutions are a growing part of the sustainable bond world. Their commitment to the sector will be crucial in helping it reach full capacity — a necessity if the monumental task of financing the world’s transition to sustainability is to be achieved before it’s too late. But the market is still in its nascent stages, and there is much work to do before even senior unsecured green bonds are standardised, giving both issuers and investors the confidence in the asset class needed to scale it up effectively. GlobalCapital sat down with 13 market professionals on the sidelines of the Euromoney/GlobalCapital Sustainable & Responsible Capital Markets Forum in Amsterdam in September to talk about the big issues in the market.

  • Social bonds show good growth by following green bond path

    The social bond market, although still young, has benefited from increased global investor demand for SRI assets and already boasts notable success stories. If market participants follow the lessons of green bonds, a promising future lies ahead. Ross Lancaster reports.

  • How can the worth of green investments be proved?

    The green bond market is only as good as the methods it can use to prove its virtue and it has to tread a fine line between credibility and expansion — upholding tough environmental standards without putting off too many new issuers. Owen Sanderson reports.

  • Pricing isn’t the only point to green bonds

    The green bond market has not developed into a source of cheap funds for borrowers, but benefits beyond pricing are there for issuers committed to having a positive environmental impact, writes Lewis McLellan.

  • US green bond market wrestles with reporting and reputation

    On the eve of the G20 summit in September, the US and China formally ratified the Paris Agreement, boosting the chances it will become international law before the end of the year. At least 55 countries accounting for 55% of global emissions must ratify the treaty for this to happen. With China and the US accounting for 38% of global carbon emissions between them, the announcement was a major step forward for the agreement.

  • Asian green bonds blossom with China, India in the lead

    The Asian green bond market has gone from being a minnow a year ago to dominating global issuance, proving that the product is here to stay. But with no real pricing advantage and the investor base still largely traditional, there is plenty holding back a shift towards growth and sophistication writes Rashmi Kumar.

  • Local markets hold future as LatAm green gets up to speed

    After a sluggish start, Latin American green bond activity is picking up. But for green financing to really gain influence, it needs to continue its progress in domestic markets. Olly West reports.

  • China takes lead in green finance, though coal still there

    China is where it's at in green finance in 2016. Its brand new domestic green bond market has zoomed to be the world's biggest in no time, and it has become the first country to produce a comprehensive plan for greening all aspects of finance. Mutual investment between China and the West is set to rise, though some have qualms about funding 'clean coal', reports Julian Lewis.

  • Social bonds broaden GBPs’ vision

    This year’s update to the Green Bond Principles has both expanded the scope of the market’s voluntary code, bringing in broader social bonds, and tightened it, by ruling some pure play transactions offside. The ‘use of proceeds’ concept is key to both developments, says Julian Lewis.

  • Framework aims to bring harmony to SRI cacophony

  • Rating agencies arrive at last

    With Standard & Poor’s now poised to follow Moody’s arrival this spring, the rating agencies are scrambling to carve out a space for themselves in a green bond market that is used to relying on other sources of independent opinion and verification, reports Julian Lewis.

  • Five Globes ratings bring ESG focus to funds

    Morningstar’s ‘Five Globes’ assessments of equity and corporate bond funds have brought environmental and social factors into focus in the fund world. Julian Lewis lifts the lid on the rating group’s approach and partnership with Sustainalytics.

  • France blazes SRI trail with Article 173 disclosure law

    France’s sustainable and responsible investor base is notably more developed than those in many other leading economies. The country’s government is preparing to launch its first green bond. But the biggest change will come as French asset owners implement the new Article 173 law on disclosing their climate exposure, reports Julian Lewis.

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