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.
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Investors are increasingly interested in renewables financing and the growth of so-called “green unicorns”, explain Natixis’ Global Head of Equity Capital Markets, Eric Arnould and Global Head of Real Assets, Anne-Christine Champion.
Speaking to Global Capital at the Natixis Renewable Energy Forum, Champion indicated that activity has substantially picked up over the last year, with a growing appetite for green, renewable projects and sustainable assets.
Arnould also noted the potential to develop a European hub for renewable energy financing. “The US is likely going to be the centre for high tech listings for some time, but I think Europe can take the lead in renewable energy,” he added.
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S&P Global Ratings has awarded a Green Evaluation score of E2/68 to Minera Los Pelambres’ proposed US$875 million loan – the second highest score available on the Green Evaluation scale of E1-E4 – making Los Pelambres the first mining company globally to receive a Green Evaluation. The loan facility will fund part of the company’s US$1.3 billion copper mine expansion project, based in Chile.
Roughly US$530 million of the US$875 million loan is labelled as a green financing since proceeds will be deployed at the new water desalination plant and the associated pipeline. The plant will bring seawater to the plant in Choapa Valley, instead of competing for fresh water in neighboring municipalities, where water resources are scarce and expensive.
Following outreach from Moorgate, TXF News covered the Green Evaluation.
The Banker has named Natixis “Most innovative investment bank for climate change and sustainability” at its 2018 Investment Banking Awards.
The award recognises the innovative work Natixis is doing in the green and sustainable finance sector, including numerous first-of-their-kind deals and the development of an internal mechanism for integrating environmental risks into their overall risk assessment for financings worldwide.
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In a recent report, S&P Global Ratings states that the proportion of green covered bonds could rise significantly, as regulators encourage green finance and banks focus increasingly on the financing of green assets.
The news was covered in Environmental Finance and Global Capital.
In an article on green finance, Michael Wilkins, Head of Sustainable Finance, says that the growth of the green finance market was spurred by the Paris Agreement and “the general realisation within the financial sector that climate change could pose a real systemic risk.”
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Following extreme weather events last year, the international community has issued multiple calls to strengthen infrastructure against extreme weather events and the expected impact of climate change. Writing for the Cambridge Institute of Sustainable Leadership (CISL), Miroslav Petkov, Director, S&P Global Ratings explores the need for and potential rise of adaptation infrastructure finance.
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In Environmental Finance’s article on the Nordic green finance market, Andrea Croner, Associate, S&P Global Ratings, says “The Nordic countries are leading the way for transparency of impact reporting” and “Nordic public sector entities have become sought-after specialists in this area. Partly thanks to their efforts, investing in green bonds has become more transparent and, therefore, more attractive to investors worldwide.”
To read the full article, please click here; the article was also published in print. (please note that the online article is behind a paywall)
With ongoing advances in sustainability, the risk of being unable to monetise carbon assets grows by the day. A new book from Routledge, Stranded Assets and the Environment: Risk, Resilience and Opportunity, explores the ramifications of asset stranding across various sectors of the global economy.
Mike Wilkins, Head of Sustainable Finance at S&P Global Ratings, supplies chapter 8, drawing on research and real-world corporate case studies to focus on the credit implications of stranded assets.
ACS Servicios Comunicaciones y Energía S.L.’s (ACS SCE) €750 million worth of green notes has received an S&P Global Ratings’ Green Evaluation score of E1/83.
This high score is supported by proceeds allocated to renewable energy and water projects in countries with medium carbon intensity grids and medium to high water stress – and is coupled with our hierarchy adjustment that reflects the role that these technologies play in the transition to a low-carbon economy.
The news was covered by Global Water Intelligence and WaterBriefing Global