What’s Happening in Sustainable Finance: A Flurry of Updates in Regulations, Taxonomies, Frameworks, and Much More

Episode Summary Hosts: Nishant Bhagchandani, Sales Manager, Sustainable Finance Solutions Nicholas Gandolfo, Vice President, Corporate Solutions Regulation, Guidance and Taxonomy Updates Keep Market Participants on Their Toes In this episode, Nick and Nishant discuss the flurry of updates in the sustainable finance regulation and guidance space. The European Union has reached a long-awaited deal on the first set of comprehensive rules for issuing green bonds. Although voluntary, the EU Green Bond Standards will help investors identify high-quality green bonds and may set a precedent for other jurisdictions. The Green Loan Principles, Social Loan Principles, and Sustainability-Linked Loan Principles were also recently updated to align more closely to current market practice and provide additional guidance to borrowers (e.g., recommendations that borrowers obtain an independent external review of their green, social and sustainability-linked loan processes). Other updates include recommendations for the sustainable finance taxonomies being developed in Australia and Canada, as well as the new draft version of the Taskforce for Nature-related Financial Disclosures (TNFD) framework. What the Final TNFD Framework Could Mean for Sustainable Finance With the release of the fourth beta framework from the TNFD, market participants eagerly await the final version, due to be published this fall. This latest beta release includes a full draft reporting framework and a set of disclosure metrics, along with assessment metrics to be used by companies. The disclosure metrics will also include some core measures which are applicable to all sectors. The final framework will help to standardize the sustainability metrics companies report on, making them usable in sustainability-linked instruments and speeding up the framework’s adoption. Key Moments 0:00:59 Market overview 0:02:32 Market forecast 0:03:22 SVB failure and climate tech 0:04:05 Morningstar Sustainalytics launches Low Carbon Transition Ratings 0:04:37 Relinking in sustainable finance 0:05:11 TNFD release beta version 4 of framework 0:05:56 Insights from Kanga News Sustainable Debt Conference 0:06:30 Taxonomy developments in Australia and Canada 0:07:24 Agreement of EU Green Bond Standards 0:08:33 High Seas Treaty will boost blue bond issuance 0:08:45 SLBs as a hedge against sustainability policies 0:09:00 Transition finance standards 0:09:12 Updated principles for green, social and sustainability-linked loans 0:10:58 SLB and SLL overview 0:13:48 Audience questions 0:17:43 Green bonds overview 0:20:56 Social bonds and loans overview 0:22:40 Labeled products, transition bonds and regulatory updates Links to Select Resources JD Supra – Asian ESG Debt Markets Take a Breath After Record Run Bloomberg – Green Bonds Turbo Charge ESG Debt Sales to Busiest February Ever ESG Clarity – Natixis Q&A: ‘Liquidity Will Be Driven by ESG Transparency and Clarity’ Environmental Finance – Credit Suisse: Another Headwind for 'Green' AT1 Bonds Morningstar Sustainalytics Launches its Low Carbon Transition Ratings Bank of China Ltd Announcement – Sustainability Re-Linked Notes Coupon Adjustment: Annual Coupon Adjustment of Sustainability Re-Linked Notes Environmental Finance – Forthcoming TNFD Metrics Would Work in Sustainability-Linked Instruments Environmental Finance – Traffic-Light System Recommended for Australia's Taxonomy Environmental Finance – EU Green Bond Standard: Provisional Deal on Landmark Regulation Agreed ESG Clarity – High Seas Treaty Will Boost Interest, Access and Issuance of Blue Bonds Climate Bonds Initiative – India’s Debut in the Sovereign Green Bond Market: First Deal Landed a Greenium! IRENA – Investments in Renewables Reached Record High, But Need Massive Increase and More Equitable Distribution International Energy Agency – Global CO2 Emissions Rose Less Than Initially Feared in 2022 as Clean Energy Growth Offset Much of the Impact of Greater Coal and Oil Use Climate Bonds Initiative – Climate Bonds Standard Expands With New Agri-Food Transitions Criteria: Commodity and Supply Chain TWGs And IWGs Now Onboarding More Episodes

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What’s Happening in Sustainable Finance: A Flurry of Updates in Regulations, Taxonomies, Frameworks, and Much More is an episode from The Sustainalytics Podcast by Morningstar Sustainalytics Podcast.

This episode is 27:00 long.

This episode was published on Apr 25, 2023.

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