What’s Happening in Sustainable Finance: Sovereigns Focus on Biodiversity, Use of Proceed Instruments Gaining Ground as Sustainability-Linked Instruments Face Scrutiny, and More

Posted on November 29, 2022



Listen on your favorite player:


Episode Summary


  • Nicholas Gandolfo, Director, Corporate Solutions
  • Sabrina Tang, Sales Associate, Sustainable Finance Solutions

Despite continued pressure on global financial markets, our hosts Nick and Sabrina highlight some bright spots within sustainable finance. From the array of green bond transactions coming to market in recent months, to sovereigns exploring sustainable finance opportunities to fund biodiversity, marine conservation and social programs, the sustainable finance market continues to push against market headwinds.

Biodiversity Rising on Sustainable Finance and Corporate Agendas

With COP27 ending and the UN Conference on Biodiversity (COP15) coming up in December, the issue of biodiversity continues to resonate among sustainable finance market participants. Companies are starting to focus more on biodiversity issues and their impact, and the Taskforce on Nature-Related Financial Disclosures has also updated its beta framework. Sovereigns, such as Uruguay, are also joining the movement by funding efforts around biodiversity using sustainability-linked bonds.

Use of Proceed Instruments Increase as Sustainability-Linked Instruments Faces Scrutiny

Contracting global financial markets have put pressure on the bond market. However, Nick does note a slight uptick in the number and variety of labeled use of proceed bond issuances in recent months relative to sustainability-linked bond issuances. This could be due, in part, to the growing scrutiny of linked bond instruments. Should they be more nuanced? Do the benefits of the pricing dynamics outweigh the penalties for not meeting targets? These are all valid questions being raised about these financing instruments that have seen tremendous growth over the last few years. It remains to be seen whether these questions translate into new norms for the market.

Key Moments

0:00:57Market overview
0:01:29 GSSS market pressures
0:02:40 Biodiversity and sovereign SLBs
0:03:51 Continuing scrutiny of sustainability-linked instruments
0:04:25FCA consultation on sustainability disclosure requirements
0:05:15 Banks explore funding pools of SLLs
0:05:45Singapore banks' commitments to Net Zero
0:06:32New reports from Climate Bonds Initiative
0:07:55 SLB and SLL overview
0:13:39Audience questions
0:17:56Green bonds overview
0:20:47Green loans overview
0:22:25Social bonds and loans overview
0:23:46Labeled products overview
0:24:50Transition bonds overview
0:26:41Regulatory and country updates


Links to Select Resources

      Recent Content

      Sustainalytics Podcast

      The Sustainalytics Podcast | Cybersecurity and Data Privacy in Focus: Cyberattacks and ESG

      In this episode of the Sustainalytics Podcast, our experts explore cybersecurity and data privacy trends, how cyberattacks affect bottom lines, and why companies should invest in robust cybersecurity and data privacy policies.

      Listen to the latest episode of the Sustainalytics Podcast | Aligning Executive Action to Strategy With Sustainability-Linked Compensation

      What’s Happening in Sustainable Finance: Funding Emerging Markets’ Climate Adaption, Regulatory Focus on Scope 3 Emissions, and More

      As 2022 winds down, we discuss notable developments in sustainable finance, including global green bond issuance surpassing $2 trillion, growing regulatory focus on scope 3 emissions reporting, and opportunities to support climate adaptation, and just transition in emerging market via sustainable finance activities.

      Sustainable Finance Insights: Special Episode on Sustainable Finance in the Metals, Mining and Commodities Sector

      In this special episode, we focus on sustainable and transition finance opportunities for issuers in the metals and mining sector and discuss considerations for banks, issuers and investors to fund improvements and mitigate environmental, social and regulatory risks.

      Sustainalytics Podcast

      What’s Happening in Sustainable Finance: Sovereigns Focus on Biodiversity, Use of Proceed Instruments Gaining Ground as Sustainability-Linked Instruments Face Scrutiny, and More

      Our review of the sustainable finance market looks at GSSS bright spots amid global financial headwinds, sovereign and corporates’ focus on biodiversity, and the uptick in use of proceed instruments as sustainability-linked instruments face scrutiny.