The ESG-focused fund-raising (green bonds) market, which has already scaled an all-time high so far this year, is set to cross the USD 10-billion-mark by December, according to Wall Street investment banking major JP Morgan, which has advised 12 of the 13 such bond issuers; so far bonds worth USD 6.24 billion have been been issued.
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According to the bank, the overall bond issuances from the country may touch USD 25 billion this year, having already raised USD 17.5 billion so far, of which ESG-compliant bonds constitute USD6.2 billion.
Globally, the environmental, social and governance (ESG) has become a key board-room topic since 2013-14 and soon investors have also been asking on the ESG principles of their investee companies.
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It can be recalled that in 2016, JP Morgan globally introduced a ban on financing of new coal mines and tighter restrictions on the financing of new coal-fired plants, which was expanded last year to include a full ban on providing lending, capital markets or advisory services to companies deriving the majority of their revenues from the extraction of coal, and by 2024, a phase out remaining credit exposure to such companies.
Earlier this year, it set a target to bring USD 2.5 trillion for solutions that support climate change and contribute to sustainable development over the next 10 years. This includes USD 1 trillion for green initiatives like renewable energy and clean technologies.
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Sustainable financing is also seeing strong momentum given ESG is a critical focus for institutional investors. Some large investors are also vocal about not investing in non-green sectors at all.
Reference- JP Morgan Website and Report, Economic Times, Mercom India, Money Control