Commerzbank publishes second FI.News of the year

Commerzbank has launched the latest edition of FI.News, the bank’s newsletter for financial institutions. This issue of the biannual newsletter evaluates how the banking sector is building resilience in the face of changing circumstances following the outbreak of the COVID-19 pandemic.

Through interviews and deep-dive articles, Commerzbank’s experts share their latest region- and product-related insights into how the current environment may lead to future innovation and opportunity. The edition contains articles on FIs are accelerating their digital programmes, the importance of ISO 20022 migration, as well as updates on how the COVID-19 crisis has shaped the banking sectors in Latin America and Eastern Europe.

Moorgate-Finn has produced FI.News since 2013. The latest edition can be found here.

Sustainable finance granted new momentum by crisis, writes Commerzbank’s Say Huan Long in Renewables Investor

Sustainable finance had already been gaining momentum prior to the pandemic, but the current situation has prompted a greater sense of urgency around the need to transition towards a greener global economy. Long Say Huan, senior banker for financial institutions at Commerzbank, explores the role of financial institutions in driving this change in Renewables Investor.

The recent oversubscription of the Kookmin Bank’s COVID-19 Response Sustainability Bond, — the first COVID-related issuance by a non-sovereign institution in Asia — provides tangible evidence of growing interest among financial institutions in prioritising sustainable outcomes. Transitioning to a greener economy, argues Long, requires financial institutions’ perspectives to be adjusted to look beyond immediate commercial gains towards longer-term sustainable profitability.

Read more in Renewables Investor.

S&P Global Ratings: EU’s post-COVID recovery plan could create its own green safe asset – covered by specialist press

If the EU carries out a proposal to finance 30% (€225 billion) of its planned €750 billion recovery fund through green bond issuance, it could become the main liquidity provider for a green safe asset, as well as the largest supranational liquidity provider for a green safe asset, according to a report recently published by S&P Global Ratings.

A larger pool of green assets would also help policymakers and central banks achieve their aim of greening the financial system. Today, the green bond market represents only 3.7% of total global bond issuance, making it difficult to ask market participants to build green portfolios. This will also likely reinforce the international role of the euro as a green currency.10

Following outreach by Moorgate, the news was covered by: Global Capital, DevDiscourse, Scottish Financial Review, International Financing Review, ESG Clarity, Chief Investment Officer, and Opalesque

Commerzbank releases latest edition of FI.News

Commerzbank has published the latest edition of FI.News, the bank’s newsletter for financial institutions. Featuring various in-depth articles and interviews, the biannual newsletter collects Commerzbank’s latest insights on the challenges and opportunities that lie ahead for financial services in today’s transformational times.

Financial institutions are understandably operating in challenging circumstances. Yet this edition of FI.News keeps its gaze firmly ahead –  exploring the ways that the current situation could be a catalyst for change in a number of areas, including digitalisation, trade finance, African trade and sustainable finance. The newsletter also provides latest news stories and internal updates from the Commerzbank Institutionals division.

Moorgate has produced FI.News since 2013. The latest edition may be found here.

Case study: Encouraging a sea-change in global shrimping

Targeting investors, Moorgate-Finn helped launch Planet Tracker’s “Shell Shock” campaign that highlighted concerns about unsustainable shrimp farming practices.

 

Planet Tracker is a non-profit financial think tank aligning capital markets with planetary boundaries. It was created to investigate the risk of market failure related to environmental limits – an investigation primarily focused on and for the investor community where environmental limits, other than climate change, are poorly understood, even more poorly communicated and not aligned with investor capital.

Planet Tracker creates ground-breaking in-depth financial analytics delivered through reports and briefing papers to raise awareness of “values-at-risk” to the financial community, and engages with institutional investors and analysts to unlock and redirect the transformative power of capital markets to deliver on sustainable development objectives.

Planet Tracker and Carbon Tracker are two initiatives of Investor Watch, founded by Mark Campanale and Nick Robins. Planet Tracker investigates the risk of market failure related to ecological limits, focusing on oceans, food and land use, as well as materials such as textiles and plastics. Carbon Tracker carries out in-depth analysis on the impact of the energy transition on capital markets and the potential investment in high-cost, carbon-intensive fossil fuels.

On the back of our strong work for S&P Global Ratings’ Sustainable Finance team, Planet Tracker approached Moorgate-Finn Partners to help launch some of their most critical reports. As with S&P Global Ratings, the strategy was simple: to “communicate their expertise”. This meant highlighting the depth and calibre of Planet Tracker’s research output by using both the information and data within the reports but also the expertise of the authors. As with previous reports, the need was to highlight the concerns, but specifically the risks, to investors using every available news generation and thought leadership tactic.

This included using its reports as news triggers for straight coverage, but also as the basis for thought leadership commentary articles (“sliced and diced” to target different audiences) and for citation, interview and podcast opportunities. The aim was also to engage with both the tier one and specialist media but also other influencers, including environmental lobbyists and analysts within leading financial institutions (perhaps utilising their blogs or internal publications).

The Approach

Starting in January 2020, our first assignment was to raise awareness among companies and investors in the US$45 billion global farmed shrimp industry, based on a Planet Tracker report called “Shell Shock” (part of their Oceans Tracker series). Hidden within the environmental concerns regarding the industry’s practices were financial exposures that Planet Tracker identified as potentially impacting investors within the supply chain. In some cases, listed companies and global brands held investments that could prove both a financial liability and reputational burden – thus providing them with a financial incentive to prefer sustainable investment and enhanced risk disclosure over practices such as mass mangrove deforestation. Ultimately, the aim was to encourage a sea-change in global business practices in the shrimping industry.

Moorgate-Finn:

  • Launched Planet Tracker’s “Shell Shock” briefing paper as news, targeting tier-one, financial, regional and specialist environmental, oceans, aquaculture and public affairs press
  • Co-ordinated a series of interviews and relationship-building meetings with both tier-one and specialist journalists: Examples: Reuters and Seafood Source
  • Partnered with other non-profit and institutional organisations dedicated to promoting sustainable development and policy i.e. the Center for International Forestry Research on podcast, blog and other thought leadership initiatives
  • Targeted upcoming features by key journalists with opportunities for Planet Tracker’s research to be cited, e.g. stories on the EU Action Plan on Deforestation; the UN Sustainable Development Goal 14: “Life Below Water”; global commitments to the Paris Agreement; and mangrove Vs. Amazon rainforest deforestation.

The results:

While the report’s launch was a key moment for first-round news coverage, it was a second and third round of thought leadership and expert citation – as well as broadening beyond the media to key influencers – that ensured the issues raised resonated with the key audiences.

Moorgate-Finn Partners secured coverage globally (an important client target) – including in Europe, Asia-Pacific and the Americas. This included in The Economist World Oceans Initiative, the Financial Times, Environmental Finance and Responsible Investor, Undercurrent News and The Asset (Asia’s leading financial/investment publication).

Leveraging the coverage, Planet Tracker has also reported engagement from more than 25 high-profile financial institutions, asset managers, investors and NGOs as well as endorsements from major players such as BNP Paribas and the Nature Conservancy Council, citing the tangible impact of the research on their business strategy/operations.

Hear also, the podcast on this subject: the Apple Podcast link is here and the Spotify link is here.

Since the launch of “Shell Shock”, Moorgate-Finn has successfully launched a major report on the relationship between Sovereign Bonds and natural capital, produced by Planet Tracker in collaboration with the Grantham Institute at the London School of Economics, its interactive Data Dashboards and a report on Food Loss & Waste in the European retail sector, “Scope for Improvement”.

S&P Global Ratings speaks to Environment Analyst on its growing ESG focus and the impact of COVID-19 on sustainable investment

As S&P Global Ratings expands its London-based specialist Sustainable Finance team to incorporate ESG and climate risk, Michael Wilkins, Global Head of Analytics & Research, Sustainable Finance, and Paul Munday, Associate Director, Climate Adaptation and Resilience Expert, speak to Environment Analyst on the team’s new mandate, and how COVID-19 is impacting the ESG space.

While broadening the scope and scale of its ESG Evaluation, S&P Global Ratings’ Sustainable Finance team has also been building a team of experts in their respective fields. For instance, the latest addition to the team, Paul Munday, joined early 2020 to provide technical expertise on adaptation and resilience. Munday’s key role is to mainstream climate risks into the agency’s existing products, projects and programmes, as well as support external engagements and thought leadership.

To read the full article, please click here.

S&P Global Ratings’ Michael Wilkins explores the green potential for telecom bonds in Aldersgate Group’s blog

As investors and corporations alike begin to see the financial benefits of managing their environmental exposure, some unlikely sectors are beginning to engage in green finance.

With three major telecom companies – Verizon, Telefonica, and Vodafone – issuing green bonds in 2019, Michael Wilkins, Global Head of Analytics & Research, Sustainable Finance, S&P Global Ratings, considers the environmental contribution of these bonds in an article for Aldersgate Group.

While the emissions-heavy telecom sector could well benefit from green bonds as a means to invest in modernising its infrastructure and technology to reduce emissions, says Wilkins, investors have expressed concerns that these issuances may be opportunistically seeking a green label to fund projects that may lack positive environmental contribution.

Read the full article here.

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.

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.