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
Across the globe, political uncertainty is increasingly becoming the rule rather than the exception. Meanwhile, trade tensions continue to define relationships between major players – such as China the U.S. and Europe. Both factors may induce caution among infrastructure investors.
Writing for Institutional Investing in Infrastructure, S&P Global Ratings’ Karl Nietvelt, Head of Research in Global Infrastructure, agrees that geopolitical events are influencing the market.
Indeed, infrastructure is “an asset class with typically lengthy lifespans that, therefore, beneﬁts from political and regulatory calm,” according to Nietvelt. Yet today’s uncertain political climate, underpinned by elections in 2019, could dampen market confidence.
Another influential trend is the rising impact of environmental, social and governance (ESG) concerns throughout the infrastructure sector. Organisations prioritising these issues “have achieved reduced costs, mitigated risk potential, and created revenue-generating opportunities,” continues Nietvelt.
Read the full article in Institutional Investing in Infrastructure here.
According to S&P Global Ratings, the long-term investment prospects for U.K. water companies remain adequate despite the forthcoming introduction of AMP7 from April 2020.
While many industry professionals perceived the U.K regulator Ofwat as taking a tougher stance on water companies, director for EMEA Utilities at S&P, Matan Benjamin, recently told Utility Week that the new targets reflect the “requests of society” on environmental, social, and governance (ESG) concerns.
Benjamin says: “This remains a strong industry. On the one hand, things are becoming more challenging for [water] companies because the regulator aims to make them work more efficiently. But that efficiency is good for society.”
Read the full article here.
Following a milestone year for the credit rating agency’s sustainable finance team, IFR has named S&P Global Ratings as its “ESG Opinion Provider of the Year”. The award recognises S&P Global Ratings’ extensive work in the environmental, social, and governance (ESG) space this year, from the launch of its ESG Evaluation in April, to its recent acquisition of the ESG ratings business from award-winning ESG specialist RobecoSAM.
“For accelerating the push to standardise disparate ESG information, identify risk, and ultimately link it to the cost of debt, S&P Global Ratings is IFR’s ‘ESG Opinion Provider of the Year’,” said the publication.
To read the full write-up, please click here.
The sustainable finance space, comprised of the green and sustainability-linked loan markets, is booming. Although the green loan market still dominates, sustainability-linked loans (SLLs) – which tie the pricing of a loan to an entity’s performance on environmental, social, and governance (ESG) criteria – are quickly catching up. Indeed, the SLL market grew nearly sevenfold to US$36.4 billion in 2018.
In a recent report, S&P Global Ratings considers the proliferation of the SLL market and the growing trend of linking ESG performance to loan margins to explicitly align pricing with achieving sustainability performance targets (SPTs), as well as the obstacles facing the SLL market; namely, transparency and disclosure.
Following outreach by Moorgate, the report was covered by Climate Change News, Banking Dive, Euractiv, and Sustainable Business News.
Earlier this year, Italy announced its plans to significantly increase renewables capacity by 2030. But what are the factors driving and impeding progress? S&P Global Ratings’ Stefania Belisario and Massimo Schiavo consider the answers for Renewable Energy World.
Italy boasts a track record of meeting renewables targets – but under different circumstances. As such, meeting the 2030 targets, though possible, is not without hurdles. Upcoming renewables auctions through 2021 are estimated at 7GW, meaning Italy may require levers beyond those scheduled to achieve their lofty ambitions.
Please click here to read the full article.
As environmental, social, and governance (ESG) considerations continue to be pushed to the fore of investors’ considerations, the automotive industry is feeling the pressure.
Speaking to Automotive World, Vittoria Ferraris, Senior Director, S&P Global Ratings, warns that while the industry has long dealt with pressures relating to the environmental impact of their products, these will be felt more strongly than ever, with growing numbers of climate-related regulation—and subsequent fines for non-compliance—threatening to reduce profitability. What’s more, as ESG considerations proliferate, the automotive sector is increasingly addressing social and governance factors as well.
To read the full article, please click here (behind paywall).
As focus on environmental, social, and governance (ESG) factors increases due to their potential impact on profit margins, Michael Ferguson, Director, Sustainable Finance at S&P Global Ratings, explores some of the most pressing risks affecting infrastructure classes, as well as the ESG opportunities that are being unearthed in the latest edition of GLIO.
“As ESG awareness and disclosure practices take root,” says Ferguson, “entities across the sector could be both better prepared for longer term, emerging ESG risks and able to anticipate strategic opportunities, rather than playing catch-up.”
To read the full article, please click here.
Writing for Renewables Investor, Timucin Engin, Senior Director, GCC Region at S&P Global Ratings, considers the growing support for sustainable finance across the Gulf Cooperation Council (GCC).
While the green bond market in the GCC is still in its infancy, Engin argues that the region’s huge investment in renewables – which serves both to alleviate the pressures of falling oil prices and further promote sustainable practices among GCC members – could spur transactions funded via green finance.
To read the article, please click here.
While ESG investing has taken time to gain a foothold in the fixed income market, ESG considerations have recently come to the fore and – according to Corinne Bendersky, Associate Director of Sustainable Finance, S&P Global Ratings – they are here to stay.
Growing recognition of the of ESG-related risks, a growing base of values-minded investors and a changing regulatory landscape have all been key drivers of the relatively recent rise of ESG-related considerations in fixed income, says Bendersky. And as further regulatory frameworks come into effect, S&P Global Ratings believes that we will see an increasing number of companies and investors seeking to meet compliance requirements and satisfy their stakeholders by incorporating ESG factors.
To read the full article, please click here (behind paywall).