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.
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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).
In an exclusive interview with T&D India, Abhishek Dangra, Infrastructure Sector Lead, SSEA, S&P Global Ratings, considers the outlook for India’s green finance market over the coming years.
“India has pledged to have 40 per cent of installed generation capacity by 2030 to come from renewables”, explains Dangra. “As such, green financing options have begun to pique interest from the Indian market.”
This rings true of Parampujya Solar Energy, a subsidiary of Adani Green Energy Ltd., who recently proposed US$500 million in green bonds to finance and refinance its solar power plants and related transmission structure. The proposed issuance received an S&P Global Ratings’ Green Evaluation score of E1/90, the highest on a scale of E1-E4. This evaluation also marks S&P Global Ratings’ first Green Evaluation in India.
For more information on S&P Global Ratings’ Green Evaluation, please click here. To read the full interview in T&D India, please click here (p.20).
Prospective investors are increasingly focusing on environmental, social and governance (ESG) factors when making investment decisions. But while, traditionally, focus centred more on environmental factors – given these tend to be more visible than social and governance factors – social and governance factors are becoming more prominent in decision-making, not least because the links between strong governance and company performance is being better understood. That’s according to Mike Wilkins, S&P Global Ratings’ Head of Sustainable Finance, who was interviewed recently by Infrastructure Investor.
“There’s been a refocus on governance as an issue,” says Wilkins. “In our experience, we see governance as having a bigger impact towards the evaluation than the other two components.”
The full interview can be found here (behind paywall).
S&P Global Ratings has published 2019’s first edition of Infrastructure Finance Outlook, its newsletter of key infrastructure and project finance-related research and ratings news.
In this edition, S&P Global Ratings considers global infrastructure investment trends, spanning China, the GCC and the Americas, along with the regulatory and political risk factors across these regions.
With global political uncertainties on the rise, infrastructure investors are even more focused on long-term sustainability. And, as environmental, social, and governance (ESG) considerations are rising to the fore of investment strategies, the credit rating agency dedicates this edition to providing greater insight to its newest offering, the ESG Evaluation.
Please see the full newsletter in PDF here.
There are possible parallels between the principles of Islamic Finance and environmental, social and governance (ESG) factors. That’s according to a recent report from S&P Global Ratings, entitled “Islamic Finance and ESG: The Missing S”.
According to the report, environmental (‘E’) and governance (‘G’) factors enjoy more visibility in modern Islamic finance. And while social (‘S’) aspects are found in several Islamic financing instruments, these have yet to be leveraged in a transparent and systematic manner. This said, a few Islamic banks have set public objectives on social responsibility, which could be demonstrative of a slow realisation across the Islamic finance industry that it could engage with a sustainable financial system, in S&P’s opinion.
Following outreach by Moorgate, the report was covered by Environmental Finance, Islamic Finance and Trade Arabia.