The momentum in the growth of sustainable finance markets is continuing apace with increased alignment between governments, the private sector and communities.
Issuance of green, social and sustainable instruments (GSS) is soaring, underpinned by continued innovation, according to experts at a recent roundtable hosted by ANZ and FinanceAsia.
“There have been many interesting developments this year [in the sustainable finance market], such as the emergence of sustainability-linked bonds,” Christina Tonkin, Managing Director, Corporate Finance, ANZ said.
The roundtable was held simultaneously in Sydney and Auckland, with both investors and issuers in attendance.
The discussion also touched on how more borrowers need to demonstrate clearly and consistently that their corporate purpose is reflected in their GSS instrument.
“We don’t want to see an issuer choosing a green format just because GSS instruments might be more marketable,” Alan Ng, senior credit analyst at First Sentier said.
Organisational buy-in is also key to drive wider GSS issuance according to Stephanie Tiah, senior analyst, funding and balance sheet at NSW Treasury Corporation.
“Being a semi-government issuer, we work very closely with NSW Government agencies and continue to promote awareness across the board, but what we’ve learnt over the years is the importance of a top-down approach to continue to drive the sustainability agenda and initiatives of the state,” she said.
Certainly, investors are increasingly willing to pay to invest in this sector, according to Yen Wong, Altius Asset Management’s head of credit research.
“They want to access investments that will have a meaningful, real-world outcome,” she said.
As a result, reporting is a key concern for investors.
“This is a developing area, so we need to work with issuers to get better reporting and disclosure, and greater transparency,” Wong said.
You can read the full discussion HERE.