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Madrid, February 28, 2023. Recently, the Climate Bond Initiative (CBI) has published the 2022 sustainable bond market metrics and the fundamental drivers of sustainable finance for 2023. According to the published data, the issuance of sustainable bonds Sustainability, Green, Social and Transition (GSS) has totaled $863.4 billion over the past year, managing to maintain its market share with 56% of the total GSS market
Below, Amine Saoudi Hassani explains what sustainable finance is all about and the trends for 2023.
The new approach to sustainable finance, by Amine Saoudi Hassani
Amine Saoudi Hassani explains that "sustainable finance can be thought of as an approach in which financial institutions and investors integrate social, environmental and governance considerations into their financing and investment decisions. In this sense, it deals with investments that already They do not only seek to maximize financial performance, but also take into account the long-term impacts that may exist on society, the environment and corporate governance (ESG)".
Taking this into account, it can be stated that the fundamental objective of this type of finance is to build a more sustainable and fair future, without losing sight of financial performance. For this reason, adds Amine Saoudi Hassani, "what is aimed at is to promote the investment of companies and projects that have sustainable practices and that carry out ESG impact assessments in their investments."
The landscape for sustainable finance in 2023
Taking the above, Amine Saoudi Hassani maintains that "sustainable finance is a concept that will continue to grow over the next few years." For 2023, the following trends are expected:
More market rigor
An expansion of CBI's VMS Standards and Certification Schemes is anticipated. This, explains Amine Saoudi Hassani, will imply greater rigor in the market, allowing potential investors to identify those SLBs that comply with the best practices under an internationally recognized standard.
Investments in resilience
Under clear definitions and rules, it is considered that green investments could be expanded to include those that generate resilience. This is an expansion that can include investments that address the vulnerability of people and ecosystems to climate change.
Turning point for the transition
Amine Saoudi Hassani affirms that "one of the most important aspects for 2023 in relation to sustainable finance has to do with the fact that this year is expected to represent a turning point for the transition. In other words, a necessary moment to be able to move forward with certain sectors that have been particularly difficult up to now and thus align heavy industry with global efforts to reach net zero polluting emissions".
Support for the green industry
Another of the trends for this year, according to the specialist, has to do with a growth in the support of the national States to the green industry. "This is especially true among global policy makers, understanding that climate considerations today must take an increasingly central place in post-coronavirus recoveries and the instability-generating inflationary backdrop."
Finally, Amine Saoudi Hassani adds that another of the perspectives for 2023 in relation to sustainable finance has to do with sovereign issuance. "Already towards the end of 2022 CBI registered GSS bonds from 43 sovereigns with combined volumes reaching 323.7 billion dollars. This is expected to continue throughout 2023, especially in the wake of the entry of India and Israel to the market with green bonds"
Contact name: Tomás Guirao
Contact description: Contact telephone number: 678451278
Photo credit: Amine Saudi Hassani
Author: Amine Saudi Hassani