Sustainable Finance
The new frontier for investment banking growth
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Opportunities and risks associated with climate change, and the UN sanctioned mandate on Sustainable Development Goals (SDGs) have opened up new areas of opportunities, largely aimed at investments that are environmentally and socially sustainable.
This has triggered an increased global appetite for financing ‘sustainability’ driven initiatives, which has the potential to unlock opportunities for Investment Banks, majorly centered around:
a) Debt financing – issuance of green, social and sustainability bonds
b) Environmental, Social and Governance (ESG) advisory, and
c) Specialized financing products and advisory services
Key Takeaways:
- Large global corporations have identified USD 2.1tn worth of climate-related market opportunities
- Business opportunities far outweigh the risks associated with climate change
- Demand for low-emission products and services alone constitutes a market opportunity of c.USD1tn
- Climate bonds have emerged as a prominent source of financing to tap this market opportunity
- Issuance of climate bonds has grown five-fold from 2015-19. Issuance is expected to cross USD 250bn by the end of 2019