In recent months, several sustainable financing developments of interest to water executives made the news:
Drought risk boosts investment in water funds – Investors are starting to pay more attention to water shortages and how to turn them into long-term investments, according to a new Bloomberg report. Water-related funds attracted more money in the nine months through September than in any full year since 2007. Meanwhile, the S&P Global Water Index, a basket of 50 water-related businesses around the world, has risen 24 percent this year to record levels, outperforming a 20 percent rise in the S&P 500.
Top underwriter of green bonds sees $1 trillion market – More first-time issuers are likely to tap financing markets for environmentally and socially responsible debt in coming years, bringing the total outstanding amount of such bonds to about $1 trillion by the first half of 2021, according to underwriter HSBC Holdings Plc. Issuance of green, social, and sustainable bonds has risen more than 70 percent this year to about $208 billion, with borrowers such as PepsiCo Inc. and Poland helping push the amount outstanding from corporations and governments to about $640 billion.
Central banks step up green investment – The European Central Bank has been buying the debt as part of its asset repurchase program, while central banks in Hungary and France have each created funds dedicated to ecological investments. While many central banks offer incentives to lenders to finance environmentally sustainable projects, they have not been major buyers of the debt due to liquidity concerns and vague guidelines as to what makes a bond truly green. As issuance increases and market participants collaborate on standards, the asset class is increasingly attractive for investment by reserve managers overseeing nearly $12 trillion.
Ceres introduces sustainability ‘accelerator’ – The sustainability non-profit Ceres launched an Accelerator for Sustainable Capital Markets designed to integrate climate change and other environmental crises into financial market regulatory policies and practices. Ceres will work to persuade financial regulators and other quasi-regulatory and legislative bodies, most prominently the Federal Reserve Board and the U.S. Securities and Exchange Commission, that they must address climate change to preserve the stability of the financial system.