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SUSTAINABLE FINANCING POLL 2021: Greening Asia Pacific’s debt markets

Appetite to issue and buy green, social and sustainability (GSS) instruments continues to grow, with ever-more sophisticated borrowers and investors taking a pragmatic view on the need for more uniformity and market standards, finds the 4th annual poll by ANZ and FinanceAsia.

The momentum behind sustainable investing in the Asia Pacific debt capital markets is spurring issuance to record highs while an ever-diverse investor base clamours for GSS loans and bonds.

There is mounting evidence of this maturing landscape. As of early June, for example, ESG-linked bond issuance in Asia Pacific had more than doubled to $69 billion so far in 2021, according to data from Refinitiv.

Covid-19 has simply accelerated a trend in GSS engagement by borrowers and investors alike that has been quickly gathering pace in recent years – increasing sustainability-linked product knowledge and enhancing research capabilities, leading to sustainability becoming more mainstream.

This is clear from the 4th annual poll conducted by ANZ and FinanceAsia during April and May 2021, with 110 completed responses from a mix of issuers and investors across Asia Pacific providing insights into their capabilities, strategies, preferences, requirements and plans in this area.

“The survey findings reinforce what we are hearing day-to-day and how our roles in capital markets continue to evolve, with a growing focus from both issuers and investors on ESG, which was particularly evident throughout Asia this year,” said Andrew Brown, director, sustainable finance, capital markets at ANZ.

Key takeaways from the survey

  • 87% of all respondents said they consider GSS issues within their organisations and integrate them into their strategy – a steady rise on findings from the same poll in previous years
  • An increasing focus on “use of proceeds” bonds, both among issuers and investors
  • Issuers are mostly driven by the desire to align with corporate sustainability objectives
  • Investor appetite is skewed towards the energy transition theme, including renewables and energy efficiency
  • More investors now say the performance of GSS instruments was greater than expected during market volatility – leading to them placing a higher perceived value on GSS debt
  • A growing number of investors have dedicated in-house ESG or SRI research capabilities
  • The majority of issuers and investors expect to see region-specific taxonomies, regulations and market standards in the coming years – and view this as positive for the development of sustainable financing

Read the survey findings here


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