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Greenbonds continued to account for the majority of sustainable bond issuance at $146 billion for the quarter. Greenbond volumes were down 12% year-over-year in the first half of 2024, driven by a sharp decline in Asia Pacific issuance.
In this paper, we describe our process for assessing ESG-labeled bonds and show that, by systematically applying this framework, investors can help set a gold standard for the market, avoid surprises from controversy and greenwashing, and potentially generate more alpha over time. Bigger, Broader, Better: The Rise of ESG-Labeled Bonds.
In the shorter term, there is also concern that ESMA’s incoming rules will create similar inconsistencies with other sustainable finance regulations, such as the EU GreenBond Standard. The post EU Names Rules a Stop-gap Solution to Greenwashing appeared first on ESG Investor.
The document also includes recommendations aimed at establishing the EU Taxonomy as the sole reference point to be used to assess and measure sustainability performance, noting that the SFDR – which predates the Taxonomy – provides its own, more flexible, definition of sustainable investments.
Parameswaran says: “Investors want to see that GSSS bonds make a real impact, and they have not been happy with the with the kind of issuance we’ve seen in emerging market labelled bonds. Gold standard. EMIA lists recipients of the gold standard on its site. Recourse for misuse of funds.
The goal should be to ensure that asset managers have all the data needed to fulfil regulatory requirements by aligning with the taxonomy and to ensure that investors are investing in sustainable funds validated by regulators and avoiding greenwashing,” she said.
Although the EU Taxonomy and SFDR were designed to increase transparency and reduce opportunities for greenwashing, it’s still early days, and there is much work to do. It is also forcing some funds to downgrade their claims and status. Very few funds are reporting exposure to taxonomy alignment higher than 0”, said Bioy.
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