With reporting on climate goals well under way, lenders are starting to develop targets for the social pillar of their ESG strategies. Financial inclusion and, increasingly, financial health are focus areas.
India’s Adani Group, the world’s largest private developer of fossil fuels, is still securing funding for its Carmichael project in Australia despite investors increasingly withdrawing support and rising negative sentiment against coal. But how long will it be able to do so?
We take a look back at the ten most popular ESG and sustainability stories of the year among our readers.
A series of forthcoming policy and industry initiatives this year should help banks and asset managers understand and report their impact on nature, but full integration of such risks still looks some way off.
Tokyo wants to become Asia’s top sustainable finance centre by riding the wave of green bond issuance in Japan. That would require a change in the mindset of local investors and an alignment with international norms, not least around its planned taxonomy.
Bankers say clean energy needs more policy stability to secure funding in the face of rising market risks, as more investors cut exposure to fossil fuels – in some cases entirely.
The Chinese territory’s property sector – which last month saw the issue of a third green guarantee – is striving to become more sustainable amid a government push to make it a regional ESG finance hub.
President Xi Jinping’s commitment to end overseas coal plant construction lacks detail and could take years to achieve any real impact. In any case, the sector has plenty of other sources of funding that need curbing if its emissions are to be cut sufficiently to reach net zero.
After a split, two groups recently launched separate ESG-focused guidance on securities lending, while the US SEC plans to make the practice less opaque and help assess its effect on shareholder voting. Investors hope the moves will make the business more sustainable and transparent.
Billions of dollars are pouring into the clean energy that is seen as crucial for the transition to net-zero emissions. But the financial sector is not taking sufficient account of what happens to such assets when they reach the end of their life. It may soon have to.
Banks say they can help build scale in voluntary carbon markets, by providing services from market-making to deal origination and stewardship. But some say it is too early for such intervention, arguing that profits still need to go into developing technologies.
Banks globally are grappling with the challenge of decarbonising their lending portfolios. Dutch lender ING has devised sector pathways for the nine most emissions-heavy sectors in its loan book – here’s how it did so.
With investors pushing back on what they see as weak or immaterial claims by issuers of sustainability-linked debt, banks are now citing similar concerns – though they are still arranging deals seen as questionable.
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