· 3 min read
HSBC just released their Global Survey on Sustainable Financing and Investing 2020 and 90% of 2,000 global investors surveyed regard ESG as important. What are the reasons for this vast engouement?
According to HSBC’s new Global Survey on Sustainable Financing and Investing 2020 considering ESG principles when investing or issuing debt is not a niche endeavour anymore, and today it’s a core element of capital markets.
This year’s global survey of 2,000 market participants found that over 90 per cent regard environmental and social issues as important. Why is that?
The Covid-19 pandemic has brought a new interest in a “Great Reset” that will change how people invest not just economically, but socially, and environmentally as well across the world.
More and more investors also feel confident in investing in sustainable funds, and even in new investment instruments such as Sustainability Linked Loans. A year ago, 75 per cent of respondents globally regarded SLLs as very or potentially interesting. Now 30 per cent of issuers say they already have experience of SLLs or green loans.
However, the industry seems to be facing two main challenges if it wants to satisfy sustainable investors.
Firstly, responders said that there is still a lack of clarity around sustainable metrics. Investors remain dissatisfied with the quality and availability of ESG data — particularly in the Middle East, where 36 per cent feel obstructed by this lack.
Secondly, this lack of quality is inhibiting issuers from clearly stating their ESG principles and investors from being able to directly compare the options. Investors feel issuers’ ESG data is not comparable enough.
The industry needs to change this in order to make investors more confients and trustworthy to invest sustainably.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
