Innovations in Sustainable Finance

EU Parliament backs 2050 climate neutral law

The European Parliament adopted its negotiating mandate on a proposed EU climate law Oct. 7, seeking carbon neutrality by 2050 and confirming amendments it made to raise the bloc's nearer-term 2030 emissions reduction target to 60% below 1990 levels, the parliament said Oct. 8.

EU Recovery Plan Could act as Lightning Rod for Green Bond Market

The European Union's coronavirus pandemic recovery plan could act as a catalyst for green bonds by providing the basis for a highly rated safe asset and spurring more private investment in the fledgling debt instrument, experts and market participants said.

EU leaders agreed in July to establish a coronavirus recovery fund offering €390 billion in grants and €360 billion in low-interest loans to pandemic-stricken EU countries. It will spend 30% of the money on climate-related projects, sparking hope among green bond specialists that it will reinvigorate the market that has been dogged by poor supply despite increasing investor interest.

What The EU Recovery Fund Breakthrough Could Mean For Eurozone Sovereign Ratings

S&P Global Ratings believes that, despite its temporary, crisis-specific nature, the Fund lends itself to becoming a permanent part of the EU architecture, a position supported by the European Parliament, not least because it would guard against unfair competition in the form of extraordinary fiscal support at the national level.

A key feature of the plan is that the supranational body, the European Union, will depart from its previous policy of not financing deficits, and borrow in commercial markets to finance upfront transfers. By issuing debt in the market on this scale, the EU also provides the ECB, as well as investors, with a new liquid euro-denominated benchmark instrument, benefiting the euro's status as a reserve currency.

With the creation of the Recovery Fund, the EU has invested in a shared fiscal response: a key step toward becoming a fiscal union.

Democrats Adopt Platform Promising Strong Action on Climate Change, Energy

During the second day of the Democrat's national convention, the party Aug. 18 announced that it had adopted a party platform that included planks reflecting many of the priorities of progressive climate hawks and the provisions of presidential nominee Joe Biden's climate and clean energy plan. However, the 92-page document does not include several items on the progressives' wish list, such as the elimination of fossil fuel subsidies and tax breaks or prohibitions on fracking.

U.S. Electric Storage Industry should Not Bank on Swing in Trade Policy: Attorney

Domestic politics and international trade spats have disproportionately challenged the global supply chain for electric storage, according to one expert on the geopolitical scope of the energy storage market, and these challenges are likely to persist, albeit somewhat moderated, even if there is a change in the White House.

Electric storage is among industries that have been heavily impacted by import restraints, including antidumping and countervailing duty measures and trade tariffs, used with increasing intensification by President Donald Trump, Bernd Janzen, a partner at Akin Gump Strauss Hauer & Feld, said at the Energy Storage Association's annual conference.

Thermal Coal Companies Removed from the S&P 500® ESG Index in Response to Market Demand

After an industry-wide, public consultation that confirmed this shift in investor perception, the S&P ESG Index Series Methodology was updated to exclude thermal coal in an extraordinary rebalance that took effect on Sept. 21, 2020.

ESG Comes into Focus for Some Pipeline Firms Seeking New Investors

CEOs of some mid-sized U.S. pipeline companies said attracting new money to the midstream sector requires a bigger emphasis on environmental, social and governance issues as investors increasingly scrutinize energy companies' employee diversity and sustainability practices.