Entries for 'Sustainable Finance'

As the “decade of sustainability” gets underway, calls for action on climate change will become increasingly strident; With electricity demand soaring, a rapid shift to low-carbon alternatives is needed to achieve net zero emissions by 2050… …but in the EU (and beyond) nuclear power remains contentious, as growth in renewables can't keep up with demand
 

Sustainability accounting hits the big time; Overwhelming demand for ESG data—over 55 data/service providers compete in this $600 million market; Flows to ESG-dedicated ETFs set to top $40 billion in 2019—up over 20% from 2018 levels; New issuance of sustainable debt and loans has surged more than 40% to some $380 billion in 2019; Firms are affected differently by ESG issues—further research needed on “materiality” factors at sector and industry level    

Reflecting the rapidly growing demand for sustainability-themed research, we will from time to time be publishing a Green Weekly Insight focused entirely on ESG and sustainable finance. Comments and suggestions welcome!

Global debt surged by $7.5 trillion in H1 2019, hitting a new record of over $250 trillion. With no sign of a slowdown, we expect the global debt load to exceed $255 trillion in 2019—largely driven by the U.S. and China.

Sustainable debt issuance is on track to reach a record high of $350 billion in 2019—up over 30% from 2018. Non-financial corporates are increasingly active in green bond markets

Low rates may boost short-term growth—but will discourage deleveraging even as debt continues to pile up; Incoming EC President Ursula von der Leyen puts climate change and sustainable finance top of the policy agenda; LIBOR transition update: focus on risks for asset managers; Venezuela: estimated total debt of over 200% of GDP, with external debt accounting for 80% of total debt

Negative-yielding debt hits a fresh record high of over $13 trillion; 75% of that is safe-haven government bonds; Low borrowing costs could provide some breathing room for EMs with high government financing needs; Climate change risks aren’t just domestic: over $29 trillion of G20 (mostly G7) cross-border investments are at risk. With awareness of these risks on the rise, our Green Flows Tracker shows net inflows of $2bn in Q2 (and record inflows for June); Insurer perspectives on LIBOR transition: the regulatory framework for EU insurers still requires a LIBOR-based term structure as the discount rate for insurance obligations.  

The June 2019 IIF Global Regulatory Update provides updates on Advocacy on Addressing Market Fragmentation, Evaluation of Too-Big-To-Fail (TBTF) Reforms and the Basel III Finalization & Cumulative Capital Impact Study.

In this short overview, we highlight climate risks to financial stability; Even in a benign scenario, some $2.5 trillion of global financial assets are estimated to be at risk from the impact of climate change; A low-carbon transition can have a substantial positive net growth effect on GDP, outweighing costs... but transition and physical risks are growing as countries fall behind on emission targets

Trade tensions and fears of a global growth slowdown send term premia and bond yields sharply lower; Tariff spat weighs on trade volumes — but inflation expectations in check as importers bear the brunt of the cost; U.S. buybacks and dividends still going strong — but ebbing earnings repatriation flows could signal a decline; Emerging market debt vulnerabilities reflected in higher risk premia; To meet ambitious goals for sustainable infrastructure and the Paris commitments on climate change, low-and medium-income countries would need to spend as much as 4.5% of GDP.

Trade and geopolitical tensions drive investors to safe havens as market risks are reassessed; Greater sensitivity to political news flow reflects growing dominance of passive investing, high-frequency trading; New Principles for Debt Transparency aim to help address debt-related vulnerabilities in low-income countries; Green asset-backed securities have surged in popularity in recent years, but are still a niche product

The May 2019 IIF Global Regulatory Update provides updates on the Financial Stability Board along with current work streams in Regulatory Capital, Cyber Security, Digital Finance, Accounting, Sustainable Finance, Systemic Risk, Insurance and upcoming events.