As a growing list of governments tap investor demand for sustainable investments, Capital Monitor analysis shows renewable energy is largely ignored by green bond allocations.
As one of the more eager issuers of bonds linked to inflation, the UK faces the prospect of higher borrowing costs as high inflation begins to look less temporary than initially expected. Sustainability-linked bonds, relatively new instruments, could provide a long-term antidote.
Capital Monitor research shows that only one in four banks have linked CEO pay to environmental impact metrics, and the ESG targets that have been set often lack transparency and impact – despite growing stakeholder pressure to address such issues.
A recent essay by the former global head of sustainable investing at the world’s largest asset manager poured scorn on the climate claims of ESG investment strategies. But experts argue that while ESG investing is far from perfect, it still has a significant role to play in helping to achieve net zero.
To ensure a safe exit, influential private equity houses are showing signs of embracing ESG within their investment practices. There is a stronger conviction that sustainability will create greater value over time. Entrepreneurs need to take note.