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Join us for a digest of the latest research, analysis and insights on the relationships between environmental social and corporate governance issues and global business, finance and society. In each episode, hear from experts sharing their insights on how institutional investors can identify and mitigate risks related to ESG factors, but also leverage opportunities in sustainable investment and debt capital markets. This is ESG in Conversation.
Episodes
Wednesday Oct 13, 2021
Wednesday Oct 13, 2021
Episode Summary
Hosts
- Nicholas Gandolfo, Director, Corporate Solutions
- Marika Stocker, Senior Manager, Corporate Solutions
In this episode, Nick and Marika discuss recent developments in sustainable finance that have caught their eye. The diverse topics covered range from the growing momentum behind sustainability-linked bonds to the Tokyo Olympics’ focus on sustainability to the latest report from IPCC. They also note the continued growth of sustainable finance globally due to more issuers, markets, products, and diversification.
Climate Change Considerations for Global Sporting Events
With the summer Olympics behind us and the winter games only a few months away, Nick and Marika discuss the climate frameworks being developed by the International Olympic Committee and other global sporting organizations. These groups are considering the future impact of climate change on global sporting events and vice versa. The frameworks will address issues such as scope 3 emissions due to travel and transport and the effects of changing weather patterns on the locations for future events and athletes’ safety.
The Nuanced and Multidimensional Nature of ESG Ratings
In response to a recent article criticizing the use of ESG scores in credit analysis, Nick touches on the nuances of ESG ratings and how they are used. He cites the multidimensional nature of ESG ratings, noting that some of Sustainalytics’ clients don’t use the top-level ESG Risk Rating score, but rather use aspects of the data to inform their models and investment approach.
Earth Overshoot Day and IPCC's "Code Red" for Humanity
Two interesting and important sets of research are also highlighted. The first is Earth Overshoot Day, which fell on July 29 this year. This marks the date when the human population’s demand for ecological resources outstrips what the Earth can generate in that year. Unfortunately, the date continues to creep closer and closer to the start of the year.
The second is the Intergovernmental Panel on Climate Change’s (IPCC) sixth assessment report. Climate Change 2021: The Physical Science Basis analyzes global climate science research and warns that some of the key effects of climate change, such as rising sea levels, may be irreversible for thousands of years. This work on the current state of the global climate system and the effects of climate change will make for a sobering read ahead of the COP26 conference in Glasgow at the end of October.
Key Moments
| 00:00:09 | Introduction |
| 00:01:18 | Market overview |
| 00:03:11 | EMIA's enhanced principles for labeled bonds |
| 00:03:58 | IOC climate framework |
| 00:05:23 | Earth Overshoot Day |
| 00:06:07 | Blockchain and green finance |
| 00:06:42 | ESG score's place in credit ratings |
| 00:07:49 | IPCC climate report |
| 00:09:25 | Carbon offsets vs targets |
| 00:11:06 | Green bonds overview |
| 00:16:21 | Social and sustainability bonds overview |
| 00:18:12 | Green loans overview |
| 00:19:49 | SLB overview |
| 00:23:23 | Audience questions |
| 00:27:27 | SLL overview |
| 00:31:29 | Labelled products |
| 00:32:33 | Transition bonds overview |
| 00:33:28 | Regulatory developments |
Links to Select Resources
- South China Morning Post: What is Driving an Almost 200 Per Cent Growth in Sustainability-linked Debt Financing
- Environmental Finance: EMIA Releases 'Enhanced' Principles for Labelled Bonds
- Earth Overshoot Day
- Ledger Insights: BIS, HKMA to Explore Tokenizing Green Bonds, Including Public Blockchain
- Environmental Finance: 'Blunt' ESG Scores Have 'No Place' in Credit Rating Process, Says KBRA
- IPCC: Climate Change 2021: The Physical Science Basis
- Environmental Finance: Initiative Launches to Build 'Integrity' in Voluntary Carbon Markets
- GlobalCapital: Deutsche Bank Debuts Green Label in Formosa Format
- The Economic Times: Axis Bank to Now Raise up to $1 Billion Via Overseas AT1 Issue
- Bloomberg Green: JPMorgan Plots Derivatives Path Into New Era of ESG Finance
- Hellenic Shipping News: NYK Issues First Transition Bonds in Japan
- Bloomberg: China Firms Shy Away From ESG Loans Holding Them to Account
- Sustainalytics SPOs:
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