ESG, Green bond issues rise sharply in 2021 as Indian firms promote sustainable business Financial ExpressESG, Green bond issues rise sharply in 2021 as Indian firms promote sustainable business Financial ExpressESG, Green bond issues rise sharply in 2021 as Indian firms promote sustainable business Financial Express
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Dealers stated that ESG instruments offer better rates than normal fundraising instruments. Bank of America has committed $1.5 billion to sustainable finance by 2030. This is in response to Indian companies adopting more sustainable business practices. Indian companies raised $7 billion through ESG bonds and Green bonds in 2021 compared to $1.4billion and $4billion in 2020 and 2019, respectively. Related NewsDealers stated that companies get better rates for their ESG instruments than they do for traditional fundraising instruments. Bank of America has committed $1.5 billion to sustainable finance by 2030. This commitment will be focused on the environment and development that aligns with the United Nations Sustainable Development Goal. Adani Green, Greenko and ReNew Power were major Green bond issuers in 2021. Axis Bank AT1, Shriram Transport Finance and Adani Electricity Mumbai are some of the largest ESG bond fundraisers. “Indian companies have become more conscious of their carbon footprints and the impact of their business on all stakeholders over the past few years and are keen to explore ESG-linked product options as they engage in more sustainable business practices,” Subhrajit Roy (India head, global capital markets), Bank of America. These instruments have led to higher bids, greater order books, and a larger investor base. According to data, $1.3 trillion has been raised by green loans or credit supply since 2006. $1 trillion of that amount was raised in 2016 when companies started practicing green business. Market participants expect issuances ESG and Green bonds will increase as India moves towards the five-point vision set out by Prime Minister Narendra Modi at COP26. Bank of America estimates that Indian companies will raise $25 billion through these instruments between 2022-2024. ESG metrics are no longer viewed as a secondary dataset by investors. Instead, they are considered an integral part of a company’s business model. Roy stated that actively managing a portfolio’s footprint can help investors and lenders reduce exposure to companies that could face legal and reputational risk arising out of environmental, social, or governance concerns. Follow us on Twitter and like us on Facebook. Financial Express is now available on Telegram. Click here to subscribe to our channel and keep up-to-date with the latest Biz news.