What's Happening in Sustainable Finance: Whether War Could Spur Adoption of Renewables, Thoughts on Just Adaptation, and More

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Episode Summary

Hosts

• Nicholas Gandolfo, Director, Corporate Solutions
• Marika Stocker, Senior Manager, Corporate Solutions 

In this episode, Nick and Marika highlight recent developments in the sustainable finance market. They note that the market is coming off a banner year — over US$1 trillion in volumes overall in 2021 —and shed light on the deals and transactions contributing to market growth. They also answer audience questions, sharing Sustainalytics’ take on where nuclear energy and mining could fit in sustainable finance. Be sure to submit your questions to [email protected].

Could Geopolitical Conflict Spur Adoption of Renewables?

Discussion around the adoption of renewable energy is growing given the impact of Russia’s war in Ukraine and other global conflicts on oil and gas exports and imports. These geopolitical conflicts have exposed the risks of overreliance on producers and certain types of energy. One possible reaction to the disrupted and restricted energy supply from Russia is an acceleration of renewables deployment across Europe. This would hopefully spur broader adoption within the region and beyond. 

Just Adaptation: Helping Nations Build Resilience to Climate Change

As governments consider what it takes to transition to a low-carbon economy, the concept of just adaptation is also being discussed. Stakeholders are looking beyond a just transition and examining the inequity between developed and developing countries in their abilities to adapt to climate change. Developing nations are more likely to be affected and have fewer resources to adequately prepare their populations and natural environments despite contributing less to the drivers of climate change compared to developed nations. Nick notes that there is potential to use sustainable finance to balance this inequity. Hopefully, we will see an evolution in sustainable finance issuances from sovereigns and corporates, with use of proceeds and KPIs that tap into some of these issues.

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Key Moments

0:00:52	Market overview
0:01:22	CBI report 2021 review
0:02:21	EF Article — GB market growth 100-fold in 10 years
0:02:50	IPCC reports
0:03:35	IFC — Guide to issuing green bonds
0:03:40	Ukraine conflict and social bonds
0:04:41	Fintech and climate tech
0:05:11	Just transition and just adaptation
0:06:13	Social taxonomy
0:06:41	EU Green Bond Standards
0:07:02	Financed emissions
0:07:36	ESG and derivatives
0:07:59	From CBI — webinar on China and new criteria for chemicals sector
0:08:36	SLB overview
0:14:14	SLL overview
0:18:10	Audience questions
0:26:09	Green bonds overview
0:30:47	Green loans overview
0:32:02	Social bonds and loans overview
0:33:42	Labeled products overview
0:34:27	Transition bonds overview
0:35:37	Regulatory and country updates

 

Links to Select Resources

• Climate Bonds Initiative – Sustainable Debt Global State of the Market 2021
• Environmental Finance – “Dramatic” 100-Fold Green Finance Growth Over Last Decade
• Environmental Finance – IFC publishes step-by-step green bond issuance guide
• GreenBiz – Will Russia’s War Spur Europe to Move on Green Energy?
• Fintech Futures – ESG and Fintechs: How Firms are Benefiting from an ESG Focus
• Environmental Finance – EU GBS 'may be a step backward' for green bond impact reporting
• IFR – Financial Markets Wrestle with Scope 3 Requirements
• Deloitte – Sustainable Finance Magazine (page 10)
• ISDA – Pre-AGM Symposium: ESG and the Role on Derivatives
• Climate Bonds Initiative – Green Bond China Investor Survey 2022
• Climate Bonds Initiative – Basic Chemicals Criteria
• Sustainalytics SPOs:
  • Pernod Ricard Sustainability-Linked Framework Second-Party Opinion
  • JAB Holdings Sustainability-Linked Bond Framework
  • EU SURE Social Bond Framework Second-Party Opinion
  • OP Mortgage Bank Annual Review (2022)
  • Green Financing Framework for Jabil Second-Party Opinion
  • Equinix Green Finance Framework Second-Party Opinion