Reporting is one of several important areas for issuers to pay closer attention to in relation to investor requirements. Yet it is a double-edged sword for issuers given the need to provide more detail at the underlying asset level is time consuming, Tapley says.
Time represents one of the key hindrances for borrowers when it comes to GSS issuance, according to respondents to the survey. This reinforces the need for more resources to be directed to the GSS space.
When resolving this for reporting purposes, Tapley encourgaes detailed conversations and efforts to harmonise data.
“Issuers need to identify the metrics that are actually meaningful for investors," she says.
Investors would also appreciate this, Brown says, adding buyers of GSS debt often don’t know what information they want until they get it.
“This is an opportunity for issuers to lead disclosure rather than waiting to be told what to provide,” he says.
The foundations for issuing GSS instruments are increasingly solid. There is clear growth in issuance when comparing 2020 poll results with those from last year – while 73 per cent of borrowers hadn’t yet issued GSS instruments in the 2019 findings, 42 per cent have either issued use-of-proceeds bonds, sustainability-linked bonds or sustainability-linked loans in 2020.
More broadly, borrowers cannot underestimate the value of a comprehensive sustainability strategy for investors – with 38 per cent of them highlighting this as an important consideration. Brown suggests a more collaborative approach to tackling hurdles or negativity around the perception of GSS issuance.
Brown suggests a more collaborative approach to tackling hurdles or negativity around the perception of GSS issuance.This involves helping treasurers to develop a good working understanding of the loans and bonds available to suit their funding strategy. As a result, they can be more proactive rather than reactive.
The key is to spread the message as widely as possibly. Borrowers that have issued GSS instruments already are keen to come to market again, Brown says.This is also the case across Asia.
“Repeat issuers that have a framework typically view GSS issues as an important part of the funding mix,” Chow says.
From the 2020 FinanceAsia and ANZ poll compound broader trends driving the upward trajectory in GSS instruments and mandates. Further fuelling the appetite of investors as well as the issuance plans of existing and potential borrowers are the sustainability conversations happening more and more in boardrooms across the region.
“Very few of the better-known listed companies don’t have a detailed approach to sustainability,” Tapley says.
The impact of COVID-19 – in conjunction with the focus on climate change – might also help to address the supply conundrum for GSS-related debt, she says.
“We are witnessing a broader acceptance of sustainability, with an uptick in issuance to help finance initiatives to respond to the big picture challenges.”
This story is an edited version of a piece which appeared in FinanceAsia. To see the original report, including the full visualisations, click HERE.