What’s new in the sustainable capital markets? - BNP Paribas CIB
 
Tuesday 11 February 2020

Our specialists debate the growth of the sustainable capital markets – and how transition bonds will address the challenges of decarbonisation.


A 60% surge in sustainable bond market volume growth in the past year has been fuelled by substantial investor demand and a major shift in corporate strategies, which are increasingly incorporating climate risk into their business models.

Environmental Finance magazine spoke with BNP Paribas' sustainable capital markets specialists on the latest market developments, from transition bonds and regional nuances to attempts to bring sustainable finance into the mainstream.

Here are our top seven takeaways.

Agnès Gourc, co-Head of Sustainable Finance Markets on market drivers: "The big change over the last 18 months has been growing interest from issuers in more resource- or carbon-intensive sectors. They are starting to understand that ESG is something that is becoming a real consideration for the investor base, and that there is going to be a capital re-allocation as a result of the risks caused by climate change."

Cécile Moitry, co-Head of Sustainable Finance Markets on factors to consider:
"For some companies, it makes sense to start with an SLL and then think about a sustainable bond. The approaches are very complementary; there is no contradiction between the two instruments nor cannibalisation."



Trevor Allen, Sustainability Research A
nalyst, BNP Paribas Markets 360 on transition bonds: "This is an essential new asset class to really help companies transition to a lower-carbon future. We want to open this up as much as possible and see transition bonds overtake green bonds by 2025"


Chaoni Huang, Head of Sustainable Capital Markets, global markets, for Asia Pacific
on the APAC opportunities:
"Asia is full of transition opportunities – heavy industry, manufacturing, textiles. These are heavy impact sectors that have been excluded, for good reasons, from the deep green bond market"



Hervé Duteil, CSR Head Americas
on US market:
"
We are at inflexion point on climate change; and for pragmatic American investors and issuers, it means it is time to move."


Antoine Sire, Head of Company Engagement at BNP Paribas
Group on integration:
"Concerns about climate, biodiversity, social inclusion and territorial imbalances means that we will have to integrate sustainability criteria in everything we do."



Constance Chalchat, Head of Company Engagement at BNP Paribas CIB
on BNP Paribas' strategy:
"Green intermediation – to be a bridge between institutional investors aiming at positive impact and corporates transforming – is core to our strategy." 




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