From niche to norm in sustainable finance

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An ANZ-sponsored roundtable – jointly held in Hong Kong, Singapore, Sydney and Auckland – heard investors and borrowers explore how to bridge various gaps in standards, data and regulation to make green, social and sustainability (GSS) debt more mainstream.

July 05, 2022

Closing key gaps in data, standards and regulation is an essential step towards facilitating a lot of the expected growth in GSS issuance across Asia Pacific. And the potential for this looks ever promising, with investors and borrowers both focused on similar, complementary goals.

This reflects the greater comfort around potential regulation going forward, especially with a more supportive view from issuers.

Further, appetite to invest in, and also issue, GSS instruments is developing with climate-related and net-zero considerations in mind. A lot of organisations are already committed to the Paris agreement and have net zero targets – the next step is to back this up with a clear sustainability strategy.

Such views were also highlighted by the 100-plus respondents to the 5th annual ANZ / FinanceAsia survey. Overall, it showed market players to be increasingly focused and savvy around how they meet internal and external sustainability goals.

Opportunities look set to emerge across Asia. In Southeast Asia, for example, there has been a notable shift based on policymaking towards tackling climate issues. Singapore, as a result, is moving towards being a sustainable finance hub with a clear green trajectory. Growth in sustainability-linked bonds (SLBs) to complement the sustainability-linked loan market seems the next step.

In Northeast Asia, meanwhile, a changing attitude towards sustainable finance bodes well for future issuance plans. With bold, politically led decarbonisation commitments by China, South Korea and Japan, for instance, the questions are more about when and how the market will take off, rather than “if” it will.

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