Demand for sustainable finance products continues to surge

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  • 30 Oct 2019 12:00 AM
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Renewables Powering Surge in Green Finance Investments, Analysis Finds

Demand for sustainable finance products continues to surge, according to the latest research note from BNP Paribas, which highlights the role of the buoyant renewable energy market in fuelling sustainable bond issuances. The analysis released yesterday finds that both sustainable bond issuance and demand picked up markedly through 2019. It predicts green bond issuance will reach $220 to $250 billion by the end of the year, setting a record for the sector. Inflows into environmental, social and governance (ESG) bonds and equity funds also showed a marked uptick, with an almost 30 percent increase in investment so far in 2019, it said. The growth in sustainable bonds comes against a broader slowdown in some key markets, with US data for retail sales, housing, business sentiment, and industrial production all lower. By contrast, over-subscription remains strong in the primary market for sustainable bonds, with Europe seeing around 3.5 times over-subscription rates and North America experiencing four times as investors turn to ESG-related bonds in the search for yield, the update states.

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