Capital market issuers in Europe are attaching greater importance to sustainable finance than a year ago, even as they have had to navigate unprecedented challenges due to the COVID-19 pandemic. As investment fund centres at the heart of Europe, Aline Ayotte (pictured), Head of Commercial Banking at HSBC Channel Islands and Isle of Man, believes Jersey and Guernsey can play a key part in supporting that trend.
The HSBC Sustainable Financing and Investing Survey 2020, published last month (14 October), found that the COVID-19 pandemic has strengthened belief in sustainability for more than a third (36%) of European issuers.
Three-quarters (77%) also say the pandemic has either reinforced their commitment to Environment, Social and Governance (ESG) or made them realise they had paid too little attention to the social component of ESG.
European issuers are also now the most committed in the world to environmental and social issues, according to the survey, with 95% saying these issues are ‘very important’ (76%) or ‘somewhat important’ (19%), compared to 93% globally.
The survey also found that Europe leads the way when it comes to investors feeling a responsibility to avoid investments with negative impacts on environment and society, 61% of European investors feel this way, compared to 53% globally.
Aline Ayotte said: “Guernsey and Jersey have established themselves as leading players in the cross-border investment funds space right in the heart of Europe, administering collectively approaching £600bn of assets. Further, both have set out their stall as specialists in the sustainable finance space, with the JFSC consulting on sustainable investing this year and Guernsey continuing to build on its Green Finance initiative. With Europe at the forefront of international efforts to fight climate change and looking to act as a world leader in sustainable finance, the islands have a significant opportunity to support issuers and investors in the transition to a net zero global economy.”
Daniel Klier, Global Head of Sustainable Finance, HSBC, added: “Sustainable finance has moved into the mainstream of the capital markets faster than we expected, and as that happens, ESG deals are increasingly being judged as a traditional asset rather than a reflection of commitment to social and environmental issues. This is an optimistic development, as ultimately the long-term success of the market will be shaped by the ability of ESG investments to compete with other traditional options on risk and return.”
The report can be accessed here.
