European ESG Loans And Bonds Surge Past 2020 Volumes Through To Q3 – Todayuknews TodayuknewsEuropean ESG Loans And Bonds Surge Past 2020 Volumes Through To Q3 – Todayuknews TodayuknewsEuropean ESG Loans And Bonds Surge Past 2020 Volumes Through To Q3 – Todayuknews Todayuknews
Impact Investing Forum 2023
London. May 04-05, 2023.
As governments and corporations intensify their efforts to reach net zero by 2050 and limit climate changes to 1.5 degrees Celsius, European ESG-linked bonds and loans have outperformed last year’s total volume. According to data from the Association for Financial Markets in Europe, the market for loans and bonds for Q1 to Q3 this year is worth nearly EUR500bn. Last year’s issuances were EUR388.7bn. Despite the Q3 volume decline, ESG-linked products have increased year-on-year despite this. Despite the Q3 volume decline, ESG linked products increased year-on-year despite the Q2 slowdown. ESG bonds saw similar growth. They accounted for 18% in the first nine month, up from 8.9% for 2020. The ESG acronym continues to dominate the discussion, but the EU SURE scheme has significantly expanded the social bond market. The vast majority of ESG-linked bonds (85.5%) in the third quarter were social bonds, compared to the 14.5% for green bonds. The push for sustainability and green linked bond is not without its difficulties. Industry bodies and regulators continue to push for common standards for disclosure of ESG in markets. Regulators and industry leaders worry about the possibility of greenwashing, which could severely undermine the market. DWS, a listed asset manager, is a case in point. As such, regulators are currently probing the market to see if firms are exaggerating their ESG credentials. READ FCA pleads for City to promote ESG talent as hiring booms. However, despite fears of greenwashing and the EU’s EUR61/tonne European Union Allowance, the carbon price continues to rise in the EU. In May, the market crossed the EUR50/tonne threshold. However, carbon prices were only EUR32.8/tonne in December 2020. As future curves point up, the trend is expected to continue. France is currently the leader in ESG-linked bonds and loans for 2021. Germany and the EU are second and third. Particularly for social bonds, France and the EU lead Europe in new issuances. They are significantly larger than Germany. Email Jeremy Chan for news or feedback.
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