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.

Planet Tracker and LSE launch report calculating the dependence of sovereign bonds on natural capital

A report published by non-profit financial think tank Planet Tracker in collaboration with The London School of Economic (LSE)’s Grantham Research Institute on Climate Change and the Environment examines the dependence of sovereign bonds on reliable flows of natural capital – that is, the world’s stock of natural resources.

The report identifies Argentina and Brazil as the two G20 countries facing the greatest number of risk factors associated with their economic dependence on their natural capital stocks such as soybean and cattle. An estimated 28% of Argentina’s sovereign bonds and 34% of Brazil’s sovereign bonds will be exposed to anticipated changes in climate and anti-deforestation policy over the next decade. For Argentina, this rises to 44% after 2030.

In the report, Planet Tracker and the LSE propose a first framework for factoring natural capital risks into sovereign debt analysis based on traditional credit rating factors: institutional, economic, trade, natural hazards, and fiscal.

Following Moorgate-Finn’s outreach, the report was covered by Bloomberg, Yahoo Finance, Environmental Finance, Natural Capital Coalition, Green Finance Platform, Bonds & Loans, Public Debt Management Network, Investing.com and Financial Post.

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.

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 TimesEnvironmental Finance, Responsible InvestorThe 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

 

S&P Global Ratings crowned “ESG Opinion Provider of the Year” in IFR’s 2019 Awards

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.

Adani Green Energy’s proposed US$362.5 million green bonds score E1/90 in S&P Global Ratings’ Green Evaluation, covered by specialist press

S&P Global Ratings scored Adani Green Energy Ltd. Restricted Group 2 (AGEL RG2)’s proposed US$362.5 million green bonds E1/90 under its Green Evaluation – the highest score on the Green Evaluation scale of E1-E4, comprising a Mitigation score of 90, a Transparency score of 89, and a Governance score of 93.

The bonds will be used to finance and refinance solar photovoltaic (PV) power plants and related transmission infrastructure in Karnataka and Rajasthan, India.

“AGEL RG2’s intention to use 100% of the proceeds for solar PV power projects is the main driver of the high score,” said Cheng Jia Ong, the primary analyst of the Green Evaluation.

Following Moorgate’s outreach, news of the Green Evaluation was covered by Renewables Now and PV-Magazine.

 

S&P Global Ratings’ Michael Wilkins discusses the future for green project bonds on TXF Proximo’s latest podcast

Green bonds have proliferated since the first green debt instrument was introduced in 2007, with banks and corporate bond issuers leading the pack. However, project bond and emerging market issuers have been more hesitant.

Speaking on TXF Proximo’s podcast, “Transmissions”, Michael Wilkins, Global Head of Analytics and Research, Sustainable Finance, S&P Global Ratings, argues that this may not be the case for much longer.

“Because there is interest among investors to benchmark according to environmental contribution as well as credit quality, there may be opportunity for green project bonds in emerging markets to grow,” said Wilkins.

Meanwhile, he believes that green project bonds may well see a surge in market interest if the high level of environmental contribution that S&P Global Ratings generally sees from the asset class is made explicit in offering circulars.

To listen to the podcast, please click here.

S&P Global Ratings publishes first Green Evaluation in Canada, covered by the specialist press

S&P Global Ratings recently scored a proposed C$750 million issuance from public-private partnership (PPP) Mobilinx Hurontario General Partnership E1/87 under its Green Evaluation.

The E1/87 score represents the highest on the Green Evaluation E1-E4 scale, and comprises a Governance score of 83, Transparency score of 77, and a Mitigation score of 91.

As well as being the first Green Evaluation in Canada, the score also marks S&P Global Ratings’ first Green Evaluation on a PPP.

Proceeds will be used to design, build, finance, operate, maintain and rehabilitate the Hurontario Light Rail Transit (LRT) project in Ontario, Canada.

Following outreach by Moorgate, the Green Evaluation was covered by: IJGlobal, Proximo, and InfraNews.

S&P Global Ratings’ Michael Wilkins considers the EU green taxonomy for Responsible Investor

 

According to S&P Global Ratings, the development of the EU’s proposed green finance taxonomy is one of the most important developments in the world of sustainable finance in recent years.

However, as with any major change, questions surrounding the implications for the capital markets abound. In an article for Responsible Investor, Michael Wilkins, Global Head of Analytics and Research, Sustainable Finance, S&P Global Ratings, considers the “pain points” that the taxonomy will have to overcome if it is to be successfully implemented and effectively drive capital towards sustainable objectives.

Namely, according to Wilkins, defining what can and cannot be defined as a sustainable economic activity should be the main focus of the taxonomy’s development, if it hopes to effectively engage the broader market.

To read the full article, please click here.

 

S&P Global Ratings Green Evaluation on Adani Green Energy’s US$362.5 million green bonds, covered by the specialist press

In its second ever Green Evaluation carried out in India, S&P Global Ratings has assigned an overall score of E1/90 to Adani Green Energy Ltd. Restricted Group 2’s proposed US$362.5 million green bond issuance. The E1/90 score is the highest on the Green Evaluation scale of E1-E4, and comprises a Transparency score of 89, a Governance score of 90, and a Mitigation score of 90.

“Adani’s intention to use 100% of the proceeds for solar photovoltaic power projects is the main driver of the high score,” said Cheng Jia Ong, the primary analyst of the Green Evaluation.

Following outreach by Moorgate, news of the Green Evaluation was covered by PV-Magazine, Renewables Now and Global Capital (behind paywall).