World’s No. 1 Oil Exporter Lures ESG Investors With Green Bonds Yahoo Canada FinanceWorld’s No. 1 Oil Exporter Lures ESG Investors With Green Bonds Yahoo Canada FinanceWorld’s No. 1 Oil Exporter Lures ESG Investors With Green Bonds Yahoo Canada Finance
Impact Investing Forum 2023
London. May 04-05, 2023.
(Bloomberg). — The largest member of the world’s No. (Bloomberg) — The world’s No. 1 oil cartel is preparing its first-ever green bond. Sustainable investors are now debating how to react. Investors see it as a positive step for the oil-dependent Gulf state to move away from fossil fuels. Others demand evidence that the debt is truly green. Others are asking for credible evidence that the debt will be green. According to people familiar with the plans, the deals could raise billions of dollars and help the Public Investment Fund finance projects such as a sustainable tourism resort on Red Sea. The resort will be powered entirely from renewable energy. Todd Schubert, head of fixed income research at Bank of Singapore Ltd., said that it doesn’t matter who the issuer is given the insatiable appetite to buy green assets. He said that Saudi Arabia’s demand for green bonds and other ESG bonds is so great that it would not be difficult to close the deal. This is in response to environmental concerns. “Because if they don’t, and they continue to produce oil the way they are producing it today, people will stop buying it eventually.” “Because if the don’t, and the continue to produce oil as they are producing it now, people will stop buying it eventually,” said Hawazen Nazief, vice president of ESG at National Energy Services Reunited Corp. But skeptics point to the fact that the first net zero commitment made by the OPEC giant was sparsely detailed. Saudi Arabia insists on its right to continue to pump crude oil for the next decades. It’s also rejected an analysis by the International Energy Agency, which calls for an end to new oil and gas exploration if the planet is to avoid catastrophic overheating.According to the government of Crown Prince Mohammed bin Salman, the de facto Saudi ruler, the main culprits behind this year’s increase in energy prices are climate activists. Nordea Asset Management, a portfolio manager at Nordea, said that it will be participating in a Saudi green bond sale “depending on the type of projects financed, how they fit the overall green ambition of the country, and if detailed near-term climate targets are published with it.” Nordea’s portfolio manager Sascha Stallberg said that the company’s participation in a Saudi green bonds sale would depend on the type and extent of the projects funded, their alignment with the country’s green ambitions, and if near-term climate targets have been published. However, there are many investors who will not be deterred by the prospect of buying a green bond from a major oil company. Uday Patnaik, a London-based money manager at Legal & General Group Plc. He also mentioned the Crown Prince’s efforts to include other energy sources in the Saudi mix. This is because the country is more vulnerable than others to the effects of global warming. In recent years, temperatures have soared to 50 degrees Celsius (122 Fahrenheit). Saudi Arabia plans to increase its mix of solar and renewable energy in its local grid by 50% by 2030. Natural gas will make up the remainder. “The country is also investing heavily on hydrogen, which is seen to be crucial to its eventual shift from oil and gas. We’ve been meeting with several different issuers in Saudi Arabia over recent days and the topic of ESG came up at every meeting. And by extension green bonds,” Francis La Salla, chief executive of Issuer Services at BNY Mellon. “In the Gulf, especially in Saudi Arabia there is a very keen awareness of the fact that you need to tap into global capital market markets to do so. While there may be some investors who refuse to buy the deal due to their green values, I don’t think that this group will be large enough to have an impact on the technicals.” Nassief, National Energy Services Reunited, says that there is a clear interest in the region for ESG investors. She also stated that there is a lot of pressure from investors mostly from Europe and the U.S. for companies around the world to improve their ESG performance. Investors look beyond ESG metrics. “They also want money,” Nassief stated. (Adds comment by Nassief)Most Read From Bloomberg BusinessweekBoeing built an unsafe plane, and blamed the pilots when it crashedFirst task for the Teamsters’ next boss: Take on UPSGoogle Wants To Save the Planet with Satellite ImagesGeneration lockdown: Where Youth Unemployment Has SteepedIndia’s Race to Vaccinate its Villages Meets with Rural Resistance(c.2021 Bloomberg L.P.
World’s No. 1 Oil Exporter Lures ESG Investors With Green Bonds Yahoo Canada Finance