Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Sustainable Finance Kx "Inside Out" Podcast Episode 16
17 Plays1 year ago
Sustainable Finance Knowledge Exchange
We strive to bring you the critical news, events, major breakthroughs and key concepts covering the happenings in this super fast, evolving area of global finance – how the world funds the transition to Net Zero.
Think of us as a curator or sorts (much like a gallery that curates the finest paintings and sculptures) as we source only the best educational knowledge around Sustainable Finance worth sharing.
Recommended
Transcript
Introduction and Host Update
00:00:04
tpreyser
Hello and welcome. um
00:00:09
tpreyser
What is playing that anyway, let's get rid of the music and get straight into it. So hello and welcome to the 16th edition. Would you believe it? The 16th edition of S F K X sustainable finance inside out podcasts, sustainable finance K X, which is K X a short for knowledge exchange is a media and training initiative.
00:00:32
tpreyser
We strive to bring you critical stories, events, major breakthroughs and key concepts covering the happenings in the superfast evolving area of sustainable finance. We hope you like the podcast. Please check us out at www.sustainablefinancekx, one word.com on Twitter or X at S-U-S-T finance KX, us finance KX, LinkedIn sustainable finance KX.
00:00:54
tpreyser
and you should be able to find us on those platforms. So that any further ado, ado I should say, let's get straight ahed into it. I'm SF Guru, SF DJ is still on his long service leave. Hopefully he will eventually be back or we'll stay him off the beach in Bali to join us for on ongoing podcasts. So let's dive um straight in.
Sustainable Finance in Southeast Asia
00:01:20
tpreyser
So I guess about sort of the end of July period, Moody's have have come out and continue to talk about volumes we can expect this year. And look, I think it's ah it's a little bit up and down, um depending on what month, depending on what quarter. I think by the half of the year, we're sort of on track. And that's all I'll say about um about ah numbers. Southeast Asia has some pretty good dynamics of volumes.
00:01:44
tpreyser
um ah volumes are rising and also some pretty big issuances which is skewing the the numbers from other parts of the world but that's all good good stuff hopefully we'll see about a trillion over 2024 but let's start let's see maybe end of third quarter week we get a better read on um on those numbers but I think green is steaming ahead and a bit of pressure on some of the other numbers and then the sustainable link loans um have been ah well under um last year at um at at this at this stage. So quarter on quarter, I guess second quarter, um probably 20% down on a quarter on quarter basis, but then if you look um first half of the year versus first half last year and beyond, yeah it's pretty yeah it's pretty similar. So let's move on
ESG Challenges and Strategies
00:02:30
tpreyser
from that.
00:02:30
tpreyser
um We spotted and looked at a pretty interesting 20-25 minute mini film that FT Films produced on who killed the ESG party, looking at all the the sort of the backlash to ESG and the different currents and undertones of what's generated.
00:02:46
tpreyser
um But I think it's a pretty good watch and I would recommend people to to check that out. They've got a bunch of other good videos and biofuels and connected sustainability topics, so super good there. In New Zealand, we noted um dumping aspects of its climate goals given interdependencies with other folks who haven't been able to live up to their end of the bargain. I think we're going to see a bit of goal creep or reverse creep. I'm not sure if there's a specific name for that.
00:03:11
tpreyser
um But I think it's important we set and continue to set and strive for um solid solid goals um and then reset them rather than back off um entirely if if there's been some external interdependencies.
00:03:24
tpreyser
um There are lots of articles some we've noticed about transmission, and about AI and about wires. There's no transition without transmission. Sounds like a bit of a wrap bar rap tune there, but but very yeah very true. um Disclosures, just ongoing CSRD, TNFD, ISBB, nothing really else to say that's insightful. There's just ongoing um noise in relation to um in relation to
Global Taxonomy and Finance Laws
00:03:51
tpreyser
that. Lots of data shortcomings for green assets, sustainability loans and all those sorts of things at banks. um I guess ESG data as ah as a general topic is is ah it's difficult. Vera launched a label for exceptional quality carbon credits. Good stuff there. India is calling for interoperability with the EU as far as its upcoming taxonomy is called. All good stuff.
00:04:14
tpreyser
um What have we got here? Barclays calling for the UK to be a destination of climate tax, again, climate tax super good um area to look at in terms of what will be coming down the menu of sustainable finance options and areas of growth um for more conventional type um loans and and bonds and and capital moves and raises um in the future. So do check ah do check that out.
00:04:38
tpreyser
What have we got? Cold demand, IEA is saying pretty broad through um broadly flat flat through 2025. Let's see what happens there. um ESG rating, speaking of data, ESG ratings, all sorts of data laws coming out for that, particularly in the UK. Blended finance continuing to make the headlines in terms of how we should grow this structuring approach, working with philanthropic ah public and private and partnerships and collaboration to move money to where it's not going, whether that be social or environmental. Oh, what
Key Reports and Legislative Updates
00:05:14
tpreyser
have we got here? An article was pretty interesting annual social bond reporting doesn't make sense. I think reporting makes sense, but to the extent that a theory of can of change can be demonstrated for social, I think that can be pretty tough over a 12 month period.
00:05:28
tpreyser
um Texas getting sued for anti-ESG bill, which discriminates on ESG grounds. Interesting that the tides are turning there. Maybe that'll be a counter. We'll lose track of who's suing who. CBI developing a sustainable finance taxonomy with New Zealand. Let's see what comes out of that. Spiritus files permit for the world's largest direct-air capture facility. we've seen um We've seen those from Climeworks in Iceland, I believe.
00:05:57
tpreyser
So good to see some other big aggressive projects um coming out. Australia, where I'm from, interesting TCFD becoming mandatory, I think 2025 or 2026, but some good legislation getting passed getting passed there. Transition risk premiums penalizes high emitters, absolutely. Finest emissions from banks' perspectives in terms of what they're financing in their loan portfolio only gives one um really one measure. I think we need to move to a multi-data, multi-measuring or multi-measured world of of funding sustainable finance where we also look at the ah potential or anticipated emissions reductions as well um to stimulate the banks to do more.
00:06:40
tpreyser
sustainable finance for transition. Speaking of transition, Asia Transition Finance Study Group released their annual report or that's coming up. um Lots of articles about transition plans, transition finance, still not a whole lot um ah still not a whole lot happening. I did like a quote from the US and we know that that's a very politicized world of ESG. Yellen calls for ah climate fight, world's greatest economic opportunity. I'd have to agree there.
00:07:07
tpreyser
um What house have we got an article about how to protect your phone during a heatwave again, that's becoming real Just an interesting yeah interesting one there um I did read a book that I just wanted to give a shout out to by Jeffrey Rizman zero carbon industry Pretty good read. ah Future Now is a bit of a similar book and Bill Gates book on how to avoid a climate disaster. um Speeded Scale also ah really good book. So those three or four similar type reads, but really good about all different technologies and the economics um around that highly, yeah highly would recommend those.
00:07:42
tpreyser
um Global South can't beat climate change without voluntary carbon credits. I guess we talked about you know high integrity carbon credits before. I think that shift of develop countries, helping developing countries north to south or however you want to view that.
Energy Sources and Market Performance
00:08:00
tpreyser
I think that's just a way to shift value and that will be incredibly important. IETA launches RSL6 platform in Singapore, Singapore looking at doing some things I think with P and&G and some other markets in terms of those um nationally defined contributions and and carbon trades.
00:08:17
tpreyser
uh under that um what have we got here interesting the um how should we call it um second party opinion market shares cost a big four or five sustainability is continuing to get smashed from a couple of years ago um and continues to um to um to decline, um S and&P catching ah catching up there, Moody's catching up there, ISA, Sustainable Fitch almost um doubling its um i its flows up there. So let's see how that sort of pans out over over the remaining course of this year. Speaking of transition before, Gfans publishing a Asia Pacific Transition Plan case studies paper. Pretty interesting read to do check that out.
00:09:07
tpreyser
um Nuclear continues to be a good topic. Small modular reactors are the future for delivering low carbon electricity. um a pretty um Some pretty interesting articles around that as nuclear continues to be topical. What else have we got here? SPTI release a technical publication on early steps or adopters for the corporate net zero um targets. Arena looking at green strategy, a guide on how to design that. Most countries have those now.
00:09:35
tpreyser
um the ah That old chestnut of deep sea mining continuing. and We talked about harmonisation of disclosures before GRIT and I and others. We won't double up on that even though we just did. um UK likely to implement if not already some SAF targets by 2025 and I think even 22% of SAF by 2040, a little bit like Singapore's starting smaller ramping up. We can't underestimate the importance of policies to drive behaviour change, particularly in these sort of transition areas.
00:10:09
tpreyser
What else have we got soon? CBI coming up with a few different reports on China and Mexico. They're probably out just as we as we yeah as we speak.
Global Initiatives and Transactions
00:10:18
tpreyser
Moving right along to linked um transactions, just a couple of General and Sodexo on the catering side, our Food and Beverage from France issue, Chanza Ashri Indonesia, EVN in Austria, um some real estate, Manistra hospitality, um tourism and hospitality. We've seen Ramsey and connected groups over the last few years issue on that. Speaking of Ramsey,
00:10:42
tpreyser
um a sustainability linked um transaction getting done again. I think the continuation of its previous loan, Squalco Land on the property side, Drax, Energy side, Caladea, or Cattalaire on the green the green side. So I shouldn't even be mentioning that in the and Gorco was green as well. Apologies, um SF Reach on the sustainability link side. A couple of others, Wilma going to market for the umpteenth time using either ratings or KPIs, more the market trend now, Capital Land and Ascot doing something with OCBC, Italy's um grid operator Turner, 400 million trade there, and the SLL, Hewlett-Packard, Sunlight REIT, and UltraTech as well.
00:11:29
tpreyser
scraping in just before ah recording their cement over in India focusing on um on emissions there. So some pretty pretty interesting mix and good to see some of the service industries um with reasonable footprints are coming coming in as well. If we jump to use of proceeds, where should we start here? I'll just ask myself. I was almost gonna ask SF Guru on where we or SF DJ where we should start, but he's not here, so I'll ask myself.
00:11:55
tpreyser
And on the sovereigns, Jamaica, talking about issuance, Rwanda, I think have issued already or talking, certainly talking about it, even in linked format, I believe, South Africa, considering a sovereign SLB, Paraguay and no rush to sell green bonds, um after investment grade, let's see what happens there, Costa Rica, publishing a framework. If we then look into banks, what have we got here? PKO bank, Kompulski, Nomura, Just Group,
00:12:22
tpreyser
um Land Transport Authority of Singapore. It's sort of crept in the municipal part there. MUFG updating its framework. Casa Central Banker, VP Bank, BPI. Bank of Ceylon over there in Sri Lanka, which is good to see. And some my other microfinance um entities, B and&G, bankngodeco Bank of Desico, Bank of IF. Yes, if I've said that. If I've said that right.
Sector-Specific Project Reviews
00:12:48
tpreyser
Um, let's have a look then to where are we renewables, um, Guinea on the green side, Atlas lose Carlos commercialization, Dora, I should say, let me reverse over that. Um, uh, commercialize Dora de Energis.
00:13:06
tpreyser
Um, on the green, the green side there, um, sale, um, I'd be a roller, a frequent issuer and remarket. Um, I think that's all on that side. Caribbean utilities. Good to see something happening over there in the Caribbean, Energer Pro.
00:13:22
tpreyser
little bit more on Zag real estate, RHL on the property side, communications construction companies, go sharing on the EV um sharing side, Pinghu state owned um over there in China, Greek seafood coming to market again, RHI looking at a transition ah framework. Again, I think the third transition from, third just transition bond, Caliber,
00:13:49
tpreyser
um on the lithium mining side, check ah check that out, hopefully we'll see a lot more on the mining side um going forward. um Sylvanian social bonds, I think even issuing a samurai format um there, Pamp Pacific Orchard on the property side, and just a few others, what should we mention here? um Without any particular order, just the sort of odds and sods remaining, ah RBW Bank, Public Utilities of San Francisco, NatWest, Government of Hong Kong issuing again, Scape Australia on the social side, although I think they've done a both a green and a sustainability linked
00:14:26
tpreyser
um property related transactions there. Tri-core on the green side. And then a few other banks that we kind of mentioned Port of Portland, i going to market again, Indiana Housing Authority on the social r DB, ah Supernatural on the bank side. HDFC, and looking at some social financing, as well as long-time capital securing some ah Financing on the social side for a gender bond in Thailand. All right, so that's a bit of a mouthful But lots of different types of issuances there even though they're from similar similar core industries if you'd like um Murray, let's have a look at and What's Murray which is our bot that asks us frequently asked questions or in Murray's case sometimes infrequently asked questions So Murray has put forward a question here
00:15:19
tpreyser
When will we see carbon credits integrated into
Carbon Credits in Sustainable Finance
00:15:22
tpreyser
sustainable finance? Look, I think over time we will see more. um They're indirectly integrated to the extent that now on a link transaction, if you have to pay a penalty, sometimes they're structured as having to pay um in the form of of carbon credits, so that's one.
00:15:38
tpreyser
um Outcomes bynic based financing advocated to or advocated by the the World Bank. We've seen some transactions in Latin America recently, in terms of Vietnam recently. I think they'll be kickers onto to coupons if something is achieved.
00:15:55
tpreyser
If carbon credits are converted, there'll be additional kickers on the coupons or maybe even principal adjustments at the end. But I think it's I think it's early days, but I do think um we're going to see financing pre carbon credits issued. And then I think on existing facilities, we're going to see carbon credits maybe as kickers, coupon adjustments and additional principal adjustments as well, depending on the outcomes of certain projects.
New Products and Podcast Wrap-up
00:16:19
tpreyser
But we might have to reinvestigate that with Murray at a future point in ah in time.
00:16:25
tpreyser
Okay, products and programs. Let's have a look at a couple of versions of ah those. pu A lot of sustainable finance trade related things ah these months. So Deutsche Bank introducing a BASFS, Sustainable Link Payables program, I think with BASF, PUMA.
00:16:46
tpreyser
I think it's a German company or thereabouts related as well. I'm sustainable financing program and for their SG goals. Again, heavily focused on on suppliers. Citi and IFC announcing a 2 billion supply chain um program initiative initiative there.
00:17:04
tpreyser
So pretty interesting on their Thailand, we saw the Bank of Thailand are regulated, they're continuing to press and support the whole theory of or proposition of transition, particularly from SMEs. What else have we got here and ah UBS talking more and more about debt to climate swaps, and or debt for nature swaps, i should I should say, in terms of giving haircuts for not having to pay back all of the debt in a transaction, um if certain undertakings can be um can be made in in lieu of
00:17:39
tpreyser
in lieu of doing that. So a couple of interesting ones a today. That really brings us to the end, to short and then short and sweet, the last couple of episodes. and But we hope that um brings a lot of interesting news and sparks some ideas for future um for future transactions.
00:17:55
tpreyser
Uh so I guess in closing, that's all we got time for. We hope you like the podcast. Check us out as we said at the start of the podcast at SUS Finance KX. That's at Twitter or X. That's our handle. www.SustainableFinanceKX. That's one word dot.com. Linked in Sustainable Finance KX.
00:18:12
tpreyser
and That is all for our 16th episode. We're rapidly closing in on 20 hosted by my just myself this time SF guru and hopefully we will find and locate SF DJ to come back after his long service leave or extra long service leave until next time Stay cool, and I'm gonna play the piano all the pianos have even disappeared so no other ah exit music is at this stage. Stay good and we look forward to providing you with more sustainable finance news in our coming episodes.