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).
Natixis acted as Sole Structuring Bank and Sole Arranger for the first issue of asset backed securities (ABS) backed by a portfolio of renewable energy plants (REBS) sponsored by Glennmont Partners, for a total amount of EUR 51.5 million (USD 58m).
The proceeds of the issue have been applied to acquire a portfolio of project finance loan agreements disbursed to finance or refinance the construction of eight wind farms totalling 52 MW and six solar photovoltaic (PV) plants with a combined capacity of 14.4 MW.
The news was covered by reNEWS, Energy Rev, Renewables Now, PFI, Private Equity Wire, TXF, MfDowJones, Citywire, Investire, Energia & Mercato, Il Sole 24 Ore, Il Messaggero, Il Giornale.
Writing for Börsen-Zeitung, Hansjörg Patzschke, Natixis’ Senior Country Manager for Germany and Austria, outlined the crucial role that banks play in supporting the fight against climate change.
Patzsche explains that banks and regulators should put in place concrete and achievable goals to support the transition to a low-carbon economy, as well as working work hand-in-hand with all actors to promote the further development of green finance.
To read the article, please click here.
Natixis is launching a new framework – its Green Weighting Factor – to measure how green its corporate and investment banking products and lending are, affecting the internal risk weightings it applies to loans and potentially staff pay.
“We are going through all our portfolio of loans to have a taxonomy on what is the impact on the climate and some other factors of the loans,” explained Natixis Chief Executive, François Riahi, at the bank’s recent green finance conference in Paris.
Natixis will internally apply a higher risk weighting on loans to high-carbon emission industries, which depresses the return on the capital achieved. Conversely, green loans will get a reduced risk weighting, improving the internal calculation of its profitability.
To read the full article click here. (paywall)
Speaking with Environmental Finance, Orith Azoulay, Natixis’ Global Head of Green and Sustainable Finance, welcomed the European Union’s taxonomy of climate-related activities as “a very positive development and a real milestone for sustainable finance”.
However, she explained that the taxonomy’s criteria for some so-called ‘transition’ activities – such as manufacture of cement and aluminium – could be too strict .
To read the full article, please click here (paywall).
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.