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Your insight into sustainable finance
The Green Bond is SEB's research publication that strives to bring you the latest insight into the world of sustainable finance.
Even though the publication covers all kinds of products and developments in the sustainable finance market, we decided to keep its historic name – "The Green Bond” – as tribute to our role as a pioneer in the Green Bond market.
In the latest issue of SEB’s The Green Bond report, our experts highlight both the rising economic cost of the climate crisis and the mounting evidence of a faster transition to a clean energy system. On the debt side, green bonds are an island of growth in a sustainable finance market under pressure.
Global clean energy investment remained strong in H1, 2023 with solar energy taking a clear lead over wind power and China remaining way ahead. The impact of policy changes in Europe and the US will kick in over the coming years. Renewable energy is still the cheapest option, but offshore wind is struggling with higher cost levels. Studies suggest climate risks are underestimated.
Labelled bonds still see growth in an overall decline in the sustainable debt transactions. Resilience in use-of-proceeds shows in increasing premiums. A lack of credibility and transparency remain key main challenges for performance-based borrowing as many issuers of sustainability-linked bonds struggle to meet their targets. Sustainable equity investors move towards new role for ESG
This new regular section of the Green Bond report covers changes in sustainable finance regulations. It is led by SEB’s Karl-Oskar Olming, one of six rapporteurs in the EU Sustainable Finance Platform. This edition summarises the new mandate of the EU Sustainable Finance Platform, and reviews recent changes and clarification regarding the EU Taxonomy, SFDR, transition finance, ESG ratings and ESRS.
Nature Action 100 is a new initiative which aims at support investors in taking on the challenge of driving urgent corporate action and reduce risks from nature loss. It will complement ongoing important efforts such as the Task Force on Nature-related Disclosures (TNFD) and Science-Based Targets for Nature (SBTN). Investors participating in Nature Action 100 will focus on key sectors and engage with companies of systematic importance for halting biodiversity loss by 2030.
Experts agree that corporates need to neutralize their residual emissions to achieve their net zero targets. To achieve this, corporates should start to gradually build up a portfolio of carbon removal credits. already today. This would allow them to manage price risks, while also sending a demand signal to project developers which spurs investments into future supply. For this to happen, a liquid and transparent market for carbon removal credits based on financial instruments needs to take shape.
Climate change, urbanization and aging infrastructure are compounding factors behind water challenges globally. Investors can get exposure to solutions that tackle the water crisis through bluetech. Like Greentech, we define Bluetech as an umbrella term for technologies used to mitigate water issues, such as water shortages and pollution. Based on a selection of 21 equities, we show that Bluetech can provide interesting opportunities as well as a cleaner exposure to companies providing solutions for water challenges.
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