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Entries for 'ESG'

Green Weekly Insight: Blended finance for climate—the time is now

Global climate finance flows hit a record $810 billion in 2021—still well short of estimated needs; To bridge the massive climate financing gaps in emerging markets, international private capital needs to be mobilized—requiring appropriate incentives and hospitable investment environments; While still niche, blended finance—using development finance to catalyze private capital—has great potential; To date, blended finance has mobilized some $70 billion of international private capital to support climate mitigation and adaptation in emerging markets.

Green Weekly Insight: ESG-linked sukuk market - promising but still niche

Global sukuk issuance surged to a record $250 billion in 2021, up from $180 billion in 2020; Only $5 billion (2% of the total) was linked to environmental, social and governance (ESG) factors—still a niche market; Indonesia has the largest green sukuk market, followed by Malaysia and Saudi Arabia; A coherent, widely-accepted taxonomy and classification framework would support further ESG sukuk market development.

Global Debt Monitor: EM Debt: The Good, the Green and the Ugly

Some $10 trillion was added to the global debt mountain last year, bringing the total to a new record high of $303 trillion. 

Green Weekly Insight: ESG in EM Sovereign Debt and Credit Ratings

Debt investors seek more ESG issuance from emerging markets as the financial materiality of ESG becomes increasingly clear; Sovereign ESG scoring is no easy task—dozens of indicators and differing approaches across providers cloud the picture; Ingrained income bias: sovereign ESG scores are highly correlated with income per capita, which could deter flows to EMDEs; Solutions to income bias include “inclusive wealth accounting" and adjusting ESG scores for a country’s level of development.

Green Weekly Insight: Blockbuster Year for ESG Investing

Investors poured over $580 billion into ESG funds in 2021—up from $320 billion in 2020; Sustainable debt issuance nearly doubled to more than $1.4 trillion in 2021, vs. $720 billion in 2020; Strong demand for voluntary carbon offsets has brought total offset issuance to over 350 MtCO2e.

Green Weekly Insight: Putting the ESG into EM Eurobonds

As pandemic strains eased, EM sovereign Eurobond issuance subsided to pre-COVID levels in 2021 ($145 billion), with Chile, Mexico, and UAE the top issuers. With global rates set to rise in 2022, and still-high funding needs, EM sovereign issuance is expected to remain broadly stable at $150-$160 billion this year.

Green Weekly Insight: Debt-for-Nature Swaps–Tackling the Triple Threat

The recent experience of Belize highlights the potential benefits of debt-for-nature swaps in tackling the triple threat of of debt, climate change and biodiversity.

Green Weekly Insight: Net zero - with or without nuclear?

Nuclear power has reduced carbon emissions by an estimated 60Gt over the past 50 years (nearly 2 years’ worth), but faces a potential decline in capacity by over two-thirds by 2040, as nuclear fleets age in mature markets. If no new nuclear capacity is built, this could add 4Gt of cumulative CO2 emissions by 2040—a step in the wrong direction.

Green Weekly Insight: Notes from DC: ESG themes from our AMM

ESG and sustainable finance themes were in focus at last week’s IIF Annual Membership Meeting; Tackling climate change requires a major surge in green R&D investment to reduce reliance on carbon-intensive activities; A broadly-agreed mechanism for carbon pricing would help decision-makers better assess both climate risks and opportunities; International financial institutions could play an even larger role in promoting ESG market development in emerging markets

Green Weekly Insight: Sharp slowdown in ESG flows

ESG funds saw net inflows of $110 billion in Q3 2021—the slowest pace of inflows of the past four quarters—of this total, emerging market securities attracted a sub-par $4.8 billion of ESG fund flows—less than 5% of the total; LatAm received the largest share of ESG fixed-income flows, while EM Asia attracted the most ESG equity flows; Substantial divergence in ESG fund classifications highlights the lack of commonly accepted disclosure standards; Around 20% of the EU fund universe is classified as ESG under the EU Sustainable Finance Disclosure Regulation (SFDR).

 

 

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