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A pandemic-drive surge in social bond issuance shows sustainable debt market is evolving, according to S&P Global Ratings – covered by specialist press

The recent surge in social bond issuance indicates that the COVID-19 pandemic has not turned issuers’ or investors’ attention away from sustainable finance. Rather, interest seems to be growing, says a recent S&P Global Ratings report.

Corporations and financial institutions are likely to become more active in the social bond market as the pandemic accelerates private issuers’ interest in social considerations, the ratings agency believes.

In terms of issuance, Europe leads – reflecting its unique regulatory and political drive to stimulate activity in the sustainable finance markets. S&P Global Ratings believes these regional trends indicate that riskier investments, earmarked for social objectives, may be drawing increasing investor interest.

Following Moorgate’s outreach, the report was covered by Environmental Finance, ZAWYA, ETF Trends, Chief Investment Officer, and Philadelphia Tribune

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Islamic financing instruments can put the S in ESG, says S&P Global Ratings – covered by specialist press

As COVID-19, and the measures implemented to slow its spread, continues to impact economies around the globe, the link between Islamic finance and the social aspect of environmental, social, and governance (ESG)-focused investing are coming to the fore, according to S&P Global Ratings.

While the similarities between Islamic finance and the environmental and governance aspects of ESG have long been recognised, the social aspect of Islamic finance has until now been somewhat secondary. Now, with COVID-19 hampering core Islamic finance markets – and unemployment rates rising – the Islamic finance industry has been exploring the possibility mitigating the damage with social instruments.

S&P Global Ratings believes Islamic finance social instruments can support core Islamic countries, banks, and corporates in navigating today’s uncertain economic landscape.

Following outreach by Moorgate, the report was covered by The Peninsula Qatar, ZAWYA, Khaleej Times, Al Bawaba, Trade Arabia, Gulf News, Gulf Times, MENA FN, Al Khaleej Today, and Pakistan Observer

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S&P Global Ratings’ Noemie de la Gorce talks to Investments & Pensions Europe on the rise of new sustainable investment vehicles

Sustainability is increasingly becoming a priority, for investors and companies alike. With the rise in financing options available on the capital markets to fund environmental, social, and governance (ESG)-supportive growth, corporates around the world have access to a broader toolbox than ever before to align with Sustainable Development Goals.

Speaking to Investments & Pensions Europe (IPE), Noemie de la Gorce, associate director, sustainable finance at S&P Global Ratings says that new instruments – such as sustainability-linked bonds – can help investors “diversify their contribution to sustainability objectives.”

While tied to different incentive mechanisms, some investors may see these instruments as having the potential to be stronger drivers of change than green bonds – since vehicles like sustainability-linked bonds can give companies financial incentives to advance their sustainability agenda, by linking the cost of funding to specific sustainability objectives.

“Some investors see sustainability-linked bonds as more powerful than green bonds in embedding sustainability into a company’s strategy, because the environmental and social objectives apply to the whole company, instead of a specific transaction,” says de la Gorce.

To read the full article, please click here.

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Planet Tracker’s Matthew McLuckie speaks to Seafood Source on investors’ exposure to deforestation-linked farmed shrimp industry

In an interview with Seafood Source, Matthew McLuckie, Director of Research at financial think tank Planet Tracker, delved into the financial risks that investors in the US$45 billion farmed shrimp industry are facing.

Shrimp farming is the cause of 30% of mangrove deforestation and coastal land use change in Southeast Asia – which is in turn threatening the ecological sustainability of the  industry, and consequently, its financial profitability.

“Investors around the world could be at risk as rules come into force preventing the importation of products linked to past and future deforestation,” says McLuckie.

According to McLuckie, neither shrimp companies nor the top 20 institutional investors report mangrove deforestation or emissions from farmed shrimp. As a result of this lack of disclosure, profit margins cannot be accurately assessed, meaning that investors cannot be confident of their risk exposure.

“These top 20 institutional investors exposed to farmed shrimp equities must insist upon greater transparency and reporting on farmed shrimp revenue from these companies because they are going to face ongoing environmental shock risks,” McLuckie continues. “These are large-scale Japanese conglomerates that are involved. This really is a global issue.”

To read the full article, please click here.

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S&P Global Ratings outlines potential credit risk for GCC posed by the energy transition, covered by specialist press

A lack of economic diversification, coupled with a sometimes-lower availability of external funding sources, means that a decreased oil and gas prices and shifting investor appetite could contribute to deteriorated creditworthiness for some GCC banks. That’s according to S&P Global Ratings, in its recent report mini-series exploring the credit risks that the transition towards cleaner energy sources could have on the GCC’s banks and overall economy.

While GCC economies have somewhat diversified away from oil since 2012, S&P Global Ratings’ hypothetical long-run stress test suggests that the average rating of a Gulf sovereign could fall by two notches from ‘BBB+’ to ‘BBB-’ if oil prices fall below US$40 by 2040, highlighting that the current pace of economic and fiscal diversification is insufficient to counter the decline in oil prices.

Following outreach by Moorgate-Finn, the research was covered by Trade Arabia, ZAWYA, AMEInfo, and The Peninsula Qatar.

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S&P Global Ratings’ sustainable debt forecast covered by the specialist press

Driven by an expansion of the pool of financing options for investors, the sustainable debt market will likely surpass US$400 billion in 2020, said S&P Global Ratings in the latest edition of its annual sustainable debt outlook.

According to the outlook, the strengthening of key market trends such as rising absolute global fixed-income issuance and private financing, as well as the regulatory and political push in Europe, will likely push green-labelled bond issuance to US$300 billion in 2020. Meanwhile, as investors continue to explore ways to contribute to sustainability objectives, the market will continue to diversify and innovate, with more nascent sustainable financing instruments complementing the continued expansion of the green bond market.

Following outreach by Moorgate-Finn, the report was covered by Financier Worldwide, Markets Media, Environmental Finance, ImpactAlpha and International Financing Review.

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Planet Tracker paper on key environmental risks for the US$45bn farmed shrimp industry covered by tier-one and specialist press

In its recent briefing paper, non-profit financial think tank Planet Tracker explored the financial impact that ongoing environmental risks could have on companies and investors in the US$45 billion shrimp industry.

Responsible for 30% of deforestation of South East Asia’s mangroves, shrimp farming is facing short-to-medium term sustainability-related supply chain risks as wholesale buyers such as Nestlé transition towards deforestation-free supply chains. The report also points to a key regulatory risk in regard to the sector’s biggest regional importer, the EU, which is seeking to ban all deforestation-linked soft commodities with its incoming Action Plan on Deforestation.

Yet despite the financial impact that such environmental risks could have on investors in the farmed shrimp industry, Planet Tracker has found no evidence of these institutions reporting against either historical mangrove deforestation or farmed shrimp emissions in their portfolios.

Following outreach by Moorgate, the paper was covered by The Economist (World Ocean Initiative), Financial Times, Environmental Finance, Responsible Investor, The Asset, BusinessGreen, GreenBiz, Undercurrent News, The Fish Site, Mis Peces, Karma Impact, ImpactAlpha here and here, The ESG Channel, The Green Finance Platform, and FocusTechnica

 

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BNY Mellon’s Saket Sharma features in Finextra’s “leveraging data” Sibos video

As part of the “Finextra at Sibos” video highlights series, Saket Sharma, Chief Information Officer, BNY Mellon Treasury Services, was interviewed at Sibos for the video focusing on leveraging data.

He says: “In order to really harness the power of data and derive meaningful insights, a data strategy needs to be in place.

To view the full “vox pop style” video (with Saket’s commentary at 2 minutes in), please click here.

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The payments revolution: BNY Mellon examines the evolving cross-border transaction landscape in the Journal of Payments Strategy & Systems

The payments landscape is evolving at a phenomenal rate. New technology developments are emerging faster than ever, driven by the growing culture for digital solutions, new regulatory requirements, and the increasing number of new entrants in the market that are challenging more traditional practices with cutting-edge concepts that appeal to the tech-savvy society of today. This convergence of factors is acting as a catalyst for banks to take action and modernise payments.

In the Journal of Payments Strategy & Systems, Michael Bellacosa, Global Head of Payments and Transaction Services, BNY Mellon Treasury Services, discusses the transformational power of SWIFT gpi. Importantly, the article also examines how banks need to maximise the possibilities of the new landscape and deliver real added value; looking beyond the payment itself and considering how they can harness toolkits such as SWIFT gpi to create solutions that best support their clients.

To read the full article, please click here (please note, the article lies behind a paywall)

 

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BNY Mellon’s Marcus Sehr talks SWIFT gpi in Global Finance’s Sibos edition

The influx of fintechs into the payments space has kickstarted an unprecedented period of innovation in transaction banking. Faced with new, tech-savvy competition, evolving client expectations, and with their own legacy infrastructure far from optimal, there is an increasing urgency for banks to deliver an enhanced, digital experience to clients. In Global Finance, Marcus Sehr, Head of BNY Mellon Treasury Services – Europe, discusses how banks are rising to this challenge, and transforming the way in which payments are processed.

To read the full article, see the “Sibos Supersection” of the magazine or click here (please note, the article lies behind a paywall)