Transitional finance could be a path to carbon neutrality for largest carbon-emitting industries, report says

NEW YORK, March 9, 2021 / PRNewswire / – S&P Global Ratings believes transition funding, including issuance, could contribute up to 1000 billion dollars per year to the economy, as companies in hard-to-shrink sectors that were previously absent from the sustainable debt market raise capital and use the proceeds for activities that help them reduce their carbon footprint.

According to our new report “Transition Finance: Finding A Path To Carbon Neutrality Via The Capital Markets,” released today, as the transition to a net zero economy gains momentum, we believe new sectors and issuers will enter the market. , widening the pool of sustainable investable financing and allowing investors to diversify their contribution to sustainability objectives.

“It has become clear that the appetite of issuers and investors for financing climate response and other environmental goals is strong and accelerating, but the achievement of the goals of the Paris Climate Agreement and the 2050 climate neutrality goals will require significant investments in new processes and technologies that enable the decarbonization of high carbon industries, ”said a sustainable finance analyst Lori Shapiro.

Transition finance offers a potential solution by allowing larger carbon-emitting industries and companies to raise capital and use the profits for activities that help them reduce their carbon footprint.

“We anticipate that transition funding will expand beyond the product-use bond model to include sustainability-related financial products and others, helping companies and countries increase capital allocation for meet their net zero emission commitments, ”Ms. Shapiro said.

We expect the bridging label to take on a much broader scope and be used across a variety of industries and activities, ranging from entities making efficiency improvements to potential overhauls of entire business models. Ultimately, we believe the transition label will extend to a range of financial products that help increase the allocation of capital for companies and countries able to demonstrate rigorous and achievable climate transition strategies. The challenge remains how this can be done quickly and efficiently while avoiding major downside risks, including green-washing or transition-washing.

This report does not constitute a rating action.

The report is available to RatingsDirect subscribers at www.capitaliq.com. If you are not a RatingsDirect subscriber, you can purchase a copy of the report by calling (1) 212-438-7280 or emailing [email protected]. Rating information can also be found on the S&P Global Ratings public website 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.

Copyright © 2021 by Standard & Poor’s Financial Services LLC. All rights reserved.

No content (including ratings, analysis and credit related data, ratings, model, software or any other application or output thereof) or any part thereof (Content) may be modified. , reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content must not be used for illegal or unauthorized purposes. S&P and any third party vendor, and their directors, officers, shareholders, employees or agents (collectively the S&P Parties) do not warrant the accuracy, completeness, timeliness or availability of the Content. The S&P parties are not responsible for any errors or omissions (negligence or otherwise), whatever the cause, in the results obtained from the use of the content, or the security or maintenance of the data entered by the S&P parties. ‘user. The Content is provided “as is”. THE S&P PARTIES DISCLAIM ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR PURPOSE, NO BUGS, ERRORS OR DEFECTS SOFTWARE, THAT THE CONTENT WILL NOT WORK OR THE CONTENT WILL WORK WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event will the S&P parties be liable for any part of any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses or losses (including without limitation , loss of income or loss of profits and opportunity costs or losses caused by negligence) in connection with any use of the Content, even if he is aware of the possibility of such damages.

Credit-related and other analyzes, including ratings, and statements in the Content are statements of opinion as of the date on which they are expressed and not statements of fact. S & P’s opinions, analyzes and ratings recognition decisions (described below) do not constitute recommendations to buy, hold or sell securities or make investment decisions, and do not address the adequacy of ‘a title. S&P assumes no obligation to update the Content after posting in any form or format. The Content must not be relied on and does not substitute for the skills, judgment and experience of the user, his management, his employees, his advisers and / or his clients when making decisions. investment and other business decisions. S&P does not act as a trustee or investment advisor unless it is registered as such. Although S&P obtains information from sources it believes to be reliable, S&P does not perform an audit and does not assume any due diligence or independent verification obligation on the information it receives. Rating-related publications may be published for a variety of reasons which are not necessarily dependent on the action of the rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyzes.

To the extent that regulatory authorities authorize a rating agency to recognize in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to grant, withdraw or suspend such recognition at any time and at its sole discretion. The S&P Parties disclaim any obligation whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage allegedly suffered as a result thereof.

S&P maintains certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, some S&P business units may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received as part of each analytical process.

S&P may receive compensation for its ratings and certain analyzes, normally from issuers or underwriters of securities or debtors. S&P reserves the right to disseminate its opinions and analyzes. S & P’s public ratings and reviews are available on its websites, www.standardandpoors.com (free), and www.ratingsdirect.com (subscription) and may be distributed by other means, including through S&P publications and third party redistributors. Additional information on our rating fees is available at www.standardandpoors.com/usratingsfees.

STANDARD & POOR’S, S&P and RATINGSDIRECT are registered trademarks of Standard & Poor’s Financial Services LLC.

SOURCE S&P Global Ratings

Source link

About Sonia Martinez

Check Also

CEO describes Swahili Honey’s journey

Central Park Bees buys honey from around 1,300 smallholder farmers in Tanzania. When Tanzanian businessman …

Leave a Reply

Your email address will not be published. Required fields are marked *