Entries for 'Green Investing'

Despite the urgency of fighting climate change, the exploration and development of new energy technologies to replace fossil fuels could take many generations. Strong policy support to incentivize front-loaded investment could significantly shorten the time that it takes to develop new green technologies—improving nuclear energy provision, green hydrogen, carbon capture and storage, biomass etc.

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 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.

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

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.  

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

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

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

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