Entries for 'Sustainable Finance'

Global sustainable debt issuance surpassed $1 trillion during the first three quarters of 2021 and is now on track to reach almost $1.5 trillion in 2021

The IIF Sustainable Finance Monitor covers key developments in the global sustainable finance agenda. In the September 2021 issue, we discuss official-sector approaches to mandatory TCFD implementation, share updates on policy and regulation, latest developments on frameworks, tools, initiatives, and key research insights.

The IIF Sustainable Finance Official Sector Calendar provides a quarterly update on upcoming events, deliverables, and policy/legislation relevant to sustainable finance from global platforms, coalitions, and standard-setters.

Agriculture employs over one billion people globally and comprises a large share of GDP in many developing economies…; …and, while representing only 3.5% of global GDP, agriculture is responsible for 12% of global greenhouse gas emissions; Greening agriculture production is key for reaching net zero--while also ensuring food security and physical risk mitigation…; …which will require adopting much more efficient agricultural production and consumption practices.

The Intergovernmental Panel on Climate Change released the first component of its Sixth Assessment Report yesterday (AR6), summarizing the current global scientific consensus and understanding of the dynamics of climate change. The findings of the new report are sobering, with near-term consequences for all countries, sectors, and humanity at large.

The global sustainable investment universe—all asset classes—topped $45 trillion in 2020, up from $30 trillion in 2018; At $17.5 trillion, fixed income is the largest sustainable investing asset class, though “ESG-labeled” debt is only $3 trillion.

Global sustainable debt issuance is on track to surpass $1 trillion in 2021 – up 30% from 2020’s totals. However, emerging markets still represent less than 15% of the sustainable debt universe, highlighting strong growth potential; China, Chile, Turkey, and Mexico are the top issuers. The outstanding green bond market is now over $1 trillion, as the non-financial corporate issuer base broadens. Updated voluntary market principles and guidelines are supportive for market growth and harmonization. 

Global sustainability-linked debt issuance (loans and bonds) is on track to surpass $320bn in 2021 – triple 2020’s totals; With ambitious climate/ESG finance targets, financial firms are the biggest issuers of sustainability-linked loans this year.

The relaunch of an active and ambitious G20 Sustainable Finance Working Group has raised hopes for greater alignment in sustainable finance policy and regulation. A well- targeted approach—focused on taxonomies, climate risk and disclosure—and close coordination with global standard setting bodies would have maximum impact, supporting the over-arching goal of sustainable market development.  

The IIF Sustainable Finance Monitor covers key developments in the global sustainable finance agenda. In the April 2021 issue, we examine climate liability and shareholder activism as well as policy and regulatory updates and a market snapshot of tech, infrastructure, R&D, and real estate. 

Returns on green bond indices tend to be more volatile than for conventional bond benchmarks, with significant differences across sectors.  Overall, green bonds exhibit similar volatility-adjusted returns as conventional bonds.

Net zero: 50% of emissions reductions needed over 2030-2050 will rely on technologies currently still under development; R&D is urgently needed to reduce “green premiums,” but there is a clean energy R&D annual shortfall of $225bn; Policy action is key: government incentives and risk mitigation can galvanize private investment into clean energy R&D