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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 the challenges facing the transition to a zero-emission economy. After surging in the first part of the decade, both clean energy investment and sustainable finance transactions are levelling off. This reflects the lack of coordination between the many interconnected elements of the transition. More policy support is likely required to restart the engines.
2023 has highlighted the challenges facing the transition. Clean energy investment and EV diffusion appear to be levelling off, and the political leadership triggered by the 2022 energy crisis is flagging, especially in Europe. Policy support is needed to get the locomotive back on the tracks.
The sustainable finance market in 2023 has already exceeded USD 1.1tn. As the next climate summit beckons, sustainable finance in non-established markets needs to grow further to make a difference. Transition bonds are a niche market but may benefit from new regulatory guidance. Recent profit warnings add pain to downward trending clean-energy equity valuations.
The EU Commission’s has taken a flexible approach to transition finance which stands in sharp contrast to the prescriptive nature of the EU Taxonomy. Corporates can choose from multiple science-based pathways and benchmarks to develop transition plans; and use labelled use-ofproceeds and performance-linked financing to meet transition targets
The energy transition needs significant changes in technology, business models, and mindset. According to the IEA, hydrogen is one of the key pillars of decarbonizing the global energy with the potential of contribute around 6% of emissions reductions to reach net zero.
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