NEW YORK (S&P Global Ratings) April 28, 2021--The issuance of sustainability-linked debt instruments will top $200 billion this year due to the burgeoning sustainability-linked loan market and the growing popularity of sustainability-linked bonds, according to a report published today by S&P Global. The report, "How Sustainability-Linked Debt Has Become A New Asset Class," notes that the pool of companies that can obtain sustainable financing is expanding quickly to include issuers who may not have sufficient capital expenditures directly related to sustainability projects, are just beginning their sustainability journeys, or are in transition and hard-to-abate sectors. Additionally, banks are bolstering growth of the sustainability-linked instrument market as they address corporate objectives to increase the share of impact financing within their lending books.
"The sustainability-linked concept will likely expand beyond the classic sustainability-linked loan or sustainability-linked bond structures into other instrument types including the newly developed sustainability-linked green bond that combines use of proceeds and sustainability-linked bond models," said S&P Global Ratings sustainable finance analyst Lori Shapiro.
Companies are using sustainability-linked instruments to fund a variety of innovative environmental technologies. The need for transparency and effective sustainability-related disclosure practices to avoid "ESG-washing" is crucial to expanding the practice of linking loan and bond pricing to environmental, social, and governance (ESG) performance.
This report does not constitute a rating action.
The report is available to subscribers of RatingsDirect at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
| Primary Contact: | Lori Shapiro, CFA, Pirmary Contact, New York + 1 (212) 438 0424; lori.shapiro@spglobal.com |
| Media Contact: | Arnaud Humblot, London + 44 20 7176 6685; Arnaud.Humblot@spglobal.com |
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