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.
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.
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.
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