ESG Financing

Global sustainability bond & loan volumes (EUR b) Record 2021 ESG financing volumes, despite slow down in Q3

H1 21 volumes by industry LMA has published updated Sustainability Linked Loan Principles

ESG Financing - Market observation per 8 November 2021 -

Demand for green and ESG bonds exceeds supply

  • Demand for ESG debt is surpassing plain vanilla debt by 40%, the biggest gap between the two instrument types this year. Investor demand is boosted by significant growth of the market combined with compulsory ESG disclosure regulations
  • Green bonds issued by Italy, the UK and the EU were amongst the most subscribed deals in October ’21. Investor demand averaged approximately 11 - 12 times the deal size
  • Investors are becoming more selective on the back of international frameworks. Outperforming ESG instruments are those with compelling sustainability characteristics

Fitch has launched a new division Sustainable Fitch

  • Fitch Ratings has launched a new division named Sustainable Fitch. The division provides thorough ESG analysis on corporates and financing instruments globally
  • Services will initially focus on sustainable debt, yet Sustainable Fitch aims to cover all labelled bonds by the end of 2021. Subsequently, the rating agency has the ambition to eventually cover the entire fixed income market
  • Purpose of the new division is to facilitate like for like comparison of sustainable debt instruments. Corporates, financing instruments and sustainability frameworks will be awarded a rating between 1 for best performers and 5 for poor performers