Breaking news – Sustainable Finance
What’s new in sustainable finance?
According to its latest update, the ISSB will assess biodiversity in its sustainability standards, focusing on investor needs and the impact on cash flows, capital costs, and finance access. It plans to review current disclosures and gather feedback, aiming to finish by mid-2025. Concurrently, it will enhance sustainability standards across eight industries, including extractives and electric utilities, to ensure they are internationally applicable and ready for 2024.
European banks reported "very low" green asset ratios (GAR) in the first year of disclosures, with an average GAR of 2.3%, far below the EBA's 2021 estimate of 7.9%. Barclays highlighted significant data shortcomings impacting comparability, noting that many green assets are excluded from eligibility, skewing the GAR. They suggested a better metric focusing on the ratio of Taxonomy-aligned assets to overall eligible assets, which could provide a clearer picture of a bank's green financing activities.
The Green Finance Institute Hive's Roadmap for Action on Biodiversity Net Gain (BNG) published in early August outlines major challenges and solutions in the BNG market based on feedback from over 100 experts. The document aims to guide the government, particularly Defra, on how to address these challenges and enhance market effectiveness. Despite the BNG policy being mandatory, early feedback shows low demand and significant barriers, with only nine sites registered by July 2024.
