Entries for 'Sustainable Finance'

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. 

U.S.-China tariff tantrum highlights risks for corporate earnings; Global IPO activity slowing as debt financing prevails—except in the U.S. where tech offerings steam ahead; At around 15% of GDP, the USD debt of non-bank borrowers is now as high in mature markets (ex-U.S.) as for emerging markets—and a risk in both cases; Innovative sustainability-linked loans gain traction; ESG bond/loan issuance set to surpass $300bn in 2019

Steady Fed gives sense of balanced risks: “healthy” U.S. economic trajectory, potential inflation rise towards 2%; Frontier market debt growing quickly — total outstanding $3.2 trillion — sovereign defaults low (for now); Green and sustainability-linked lending nearly doubles in 2018 – now almost $100 billion outstanding; LIBOR transition fraught with risks — linked to contract maturity profiles, spreads to new benchmarks

The green loan market is still a niche but growing fast: gross issuance hit $60 billion in 2018—up by 30% from 2017    

Environmental, social and governance (ESG) considerations front and center for EM infrastructure

With this note we are launching a new line of topical research on issues related to sustainable finance. After record levels of issuance in Q4 2018 and Q1 2019, the green bond universe is now over $430 billion

Sustainable growth high on the policy agenda; Market fragmentation poses risks for scaling up green finance markets; Demographic and social challenges for growth in China point to a decline in savings rates and home sales

The IIF has submitted the response letter to the Prudential Regulation Authority (PRA) Consultation Paper - Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change.

Fed flexibility on balance sheet normalization could have far-reaching consequences; Tech stock valuations suggest fears that trade war is morphing into tech war; A more dovish Fed spells respite for highly indebted EM borrowers; Unprecedented growth in green syndicated lending; Sharply higher debt in vulnerable low-income countries puts sustainable development goals at risk 

Davos debates debt, urges action on financing for sustainable development goals; Analysts get more pessimistic about the outlook for corporate earnings; Global equity valuations are back to long-run averages—but are they cheap?; Long-term investors look to increase allocations to EM equities