Companies with stronger ESG standards usually perform better financially, according to recent research. By Paul A. Davies and Michael D. Green A recent report by Axioma, provider of enterprise market risk and portfolio analytics solutions, found that companies with better environmental, social, and corporate governance (ESG) standards “…often outperform the market” and exceed their financial … Continue Reading
Initiative will advance the UK’s Paris Agreement targets by serving as a “one-stop shop for world-leading climate science, and for capital.” By Paul A. Davies and Michael D. Green UK Chancellor, Philip Hammond, has announced plans to launch a Green Finance Institute (GFI), through funding from both the UK government and the City of London Corporation. … Continue Reading
Increasingly, financial institutions are looking to align business decisions with environmental principles. By Paul A. Davies and Michael D. Green ABN AMRO, ING, and Rabobank have teamed up to publish guidelines for investing in the circular economy. The banks have designed the guidelines to help financial services companies around the globe transition towards a circular … Continue Reading
Latest iteration of popular guidelines continue with voluntary, market-driven approach. By Paul A. Davies and Aaron E. Franklin The annual update of the Green Bond Principles (now also including the Social Bond Principles, and the Sustainability Bond Guidelines, collectively, the Principles) on June 14, 2018 created few surprises. The Principles, highly influential in the sustainable … Continue Reading
Measures aim to establish consistent criteria for sustainable investments, as well as clear market standards for investors. By Paul A. Davies and Aaron E. Franklin Overview The European Commission (EC) has set out its first proposal for “concrete actions” to help the EU financial sector take the lead in establishing a greener economy and supporting … Continue Reading
The action plan recommends leveraging London’s leading role in global green finance to grow green opportunities. By Paul A. Davies The Green Finance Taskforce’s first report, “Accelerating Green Finance,” advises the UK government on how to achieve important green finance goals, carbon targets in relation to the Paris Agreement. The report, published on 28 March, … Continue Reading
The Green Loan Principles may help sustainable investment growth By Paul A. Davies and Aaron E. Franklin The Loan Market Association and the Asia Pacific Loan Market Association recently announced the “Green Loan Principles” joint project. This two-page document, announced on March 21, 2018, seeks to stimulate the de minimis green loan market by following … Continue Reading
Recommendations signal a major shift for Europe’s financial system through both legislative and non-legislative changes. By Paul A. Davies and Aaron E. Franklin The European Commission (EC) has revealed its action plan for mobilizing the financial system to encourage a “greener and cleaner economy.”[1] The plan, which was released on 8 March, states that it … Continue Reading
By Aaron Franklin The United States has the deepest, most liquid capital markets in the world, attracting issuers from across the globe. To sell to US investors, these issuers must comply with US securities laws, entailing a more rigorous diligence and disclosure process. Issuers must weigh the benefits of increased demand against the additional costs, … Continue Reading
New requirements build on China’s rapid progress in green finance to increase transparency across the market By Paul Davies, Bridget Reineking and Andrew Westgate The China Securities Regulatory Commission (CSRC), in collaboration with China’s Ministry of Environmental Protection, has introduced new requirements that, by 2020, will mandate all listed companies and bond issuers to disclose environmental, … Continue Reading
By Paul Davies, Bridget Reineking, and Andrew Westgate China has issued numerous green policies in an effort to support President Xi’s signature “One Belt, One Road” initiative, which aims to mitigate environmental and social risks arising from China’s overseas lending. Although few of these policies are legally binding, they reflect China’s heightened focus on environmental … Continue Reading
By James Barrett, Paul Davies and Michael Green The Equator Principle Association has committed to revise the Equator Principles (EPs) for the first time since 2013. The EPs provide a voluntary risk management framework for determining, assessing, and managing environmental and social risk for certain project finance transactions. More than 90 financial institutions in 37 … Continue Reading
By Paul Davies, Bridget Reineking, and Andrew Westgate The Chinese government has announced a US$4 trillion investment in developing infrastructure globally under the “Belt and Road Initiative” (BRI). Under the BRI the Chinese government will spend US$750 billion on overseas investments in the next five years alone. Although China often cites the BRI as the … Continue Reading
By Paul Davies, Bridget Reineking, and Andrew Westgate Since establishing the People’s Bank of China’s Green Finance Task Force in 2014, China has encouraged green financing mechanisms through a variety of pioneering initiatives. For example, the country has designated five green finance pilot zones, within which financial institutions are incentivised to provide credit and special … Continue Reading
By Paul Davies, Bridget Reineking, and Andrew Westgate President Xi has announced the creation of a new environmental bureau to oversee China’s state-owned natural resources. Establishment of the new bureau is one of the most notable outcomes of the recent meeting of the 19th National Congress of the Communist Party, and follows Xi’s pronouncement that … Continue Reading
By Paul Davies, Bridget Rose Reineking and Andrew Westgate At the 19th National Congress of the Chinese Communist Party, President Xi Jinping asserted his country’s emerging leadership in environmental stewardship and pledged to build a “beautiful China”. In his speech to the 2,300 delegates and guests assembled for the Congress’s opening session, President Xi lauded China’s … Continue Reading
By Paul Davies and Andrew Westgate On 18 October 2017, the 19th National Congress of the Chinese Communist Party will convene, after the week-long National Day holiday, marking one of the most important dates on the Chinese political calendar. Among the issues that National Congress members will surely discuss, is the importance of implementing strategies … Continue Reading
By Paul Davies and Michael Green The first solar farm has successfully launched in the UK without government subsidisation. Clayhill Solar Farm, a 10 megawatt (MW) site near Flitwick in Bedfordshire, is capable of generating enough power for 2500 homes. Clayhill’s developer, Anesco, is a private company specialising in the design and development of solar … Continue Reading
By Paul Davies and Michael Green The UK government has announced that it is bringing together a new taskforce led by senior financiers in order to encourage the growth of “green finance”. The taskforce, which will be chaired by Sir Roger Gifford, former lord mayor of London, has six months to develop proposals aimed at … Continue Reading
By Paul Davies and Andrew Westgate Market research has long recognized China as the largest investor in its own domestic renewable energy industry. According to Bloomberg New Energy Finance, China invested US$102 billion in 2015 alone. However, a report by the Institute for Energy Economics and Financial Analysis (IEEFA) found that China’s dominance in renewables … Continue Reading
By Paul Davies and Michael Green The High Level Expert Group on sustainable finance (the Group), which the European Commission (the EC) established, published its interim report on 13 July 2017. The report sets out the key steps required to create a financial system that supports sustainable investment, as well as identifying areas for financial … Continue Reading
By Paul Davies and Michael Green On 16 June 2017, the Bank of England (BoE) published an article setting out its response to climate change, explaining that climate change and society’s response to it presents certain financial risks. These risks arise through two main ways: The physical effects of climate change such as droughts, floods … Continue Reading
By Paul Davies and Michael Green The European Commission has recently published plans to integrate sustainability considerations into decisions made by investors within the EU. More specifically, the EU is looking to spell out in legislation, that the consideration of ESG issues should be incorporated into the fiduciary duties of EU asset managers. The main … Continue Reading
By Paul Davies and Aaron Franklin Royal Philips, a health technology company, has recently agreed to an innovative revolving credit facility agreement with a margin linked to the company’s year-on-year sustainability performance improvement. The agreement was entered into by a consortium of 16 international banks (led by ING, as Sustainability Coordinator) and provides for a … Continue Reading
