European interest in social bonds growing
European interest in social bonds growing
But investors find supply isn’t keeping pace with capital they want to deploy
Photo: Marc Schlossman/Fovea
Luba Nikulina thinks standards are needed in the social bonds market to avoid ‘unintended consequences in certain geographies.’
Asset owners in Europe are keen to deploy more capital into social bonds but say they are challenged by limited opportunities.
European investors exposure to impact investments, particularly social bonds, has been growing in the last year in part due to new rules under the European Union s Sustainable Finance Disclosure Regulation, which became effective in March. Under the rules, regulators are steering pension funds investments into assets with a specific environmental, social and governance impact in addition to requiring them to incorporate ESG factors into all other allocations.
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Over half of financial services professionals claim ‘greenwashing’ is rife in the industry, study says
Protestors outside Lloyd s City HQ last week.
More than half of financial services professionals believe ‘greenwashing’ is rife within the industry, according to a study released today, as employees fear competitors intentionally inflate their sustainable practices.
The study by data agency iResearch Services, which polled 550 decision-makers at financial institutions, also found that 38 per cent believe every business is operating ‘unethically’ by claiming to be environmentally sustainable.
In the run-up to COP26, the UN’s flagship climate conference, financial institutions across the UK and the City have been upping their green game.
Sponsored feature: Getting to grips with ESG reporting
Mike McCabe of MUFG Investor Services.
The move towards environmental, social and governance (ESG) investing is accelerating fast as regulators take actions – most notably in Europe with the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
The regulation, which came into force on March 10, is seen as a gamechanger for tackling ESG reporting and transparency and will likely have a knock-on effect on other regulatory regimes. It applies not only to EU financial market participants but also to those outside Europe that market their products to EU investors.
Mike McCabe, Chief Commercial Officer at MUFG Investor Services, part of Mitsubishi UFJ Financial Group, says the SFDR is the first real regulatory step to address the lack of transparency in ESG investing, and has generated a lot of interest outside of Europe.