Background

Equity Capital Market Opportunity

The assets under management of ESG-related funds range between US$3 trillion and US$31 trillion, depending on the definition. According to the Global Sustainable Investment Alliance, US$31 trillions of funds is held in sustainable or green investments in 2018. These money flows account for one-third of the tracked AUM, and in some places have reached more than half.

Debt Capital Market Opportunity

Green bonds, constituting more than half of the entire sustainable debt market in 2019, saw US$271 billion issued – up from US$182 billion in 2018. Green bonds and loans that strictly follow formal green certification standards (or “principles”), showed 42% growth in 2019 to US$177 billion.

Private Sustainability Finance

Companies and investors are increasingly working together to address major global challenges. The adoption of environmental, social and governance (ESG) considerations in private investments is evolving from a risk management practice to a driver of innovation and new opportunities that create long-term value for business and society. Promoting ESG adoption throughout the investment value chain can encourage greater private investment in sustainable development, resulting in greater impact. The elements for an ESG coalition are in place. In addition to the UN Global Compact, a number of principle-based, voluntary ESG initiatives are starting to gain traction throughout the private investment chain, including: - UNEP Finance Initiative: with over 200 institutions, including banks, insurers and fund managers - Sustainable Stock Exchanges Initiative: a peer-to-peer learning platform for exploring how exchanges can work together with investors, regulators, and companies to enhance corporate transparency and ESG performance and encourage responsible long-term approaches to investment - Principles for Responsible Investment: representing asset managers and asset owners with well over US $45 trillion in capital - Equator Principles: a coalition of banking and similar financial institutions incorporating environmental and social risk into project finance transactions, covering over 70 per cent of all international project finance debt in emerging markets - Principles for Sustainable Insurance: a sustainability framework for the development of innovative risk management and insurance solutions

Financial Innovation Platform for the SDGs