The results of the HSBC Sustainable Financing and Investing Survey 2019 are out and the message is clear. Both issuer and investor appetite to address sustainability is overwhelming; 94 per cent of investors and 93 per cent of issuers think it’s important. In all regions there is a sense that caring about the environment and society is not just a pragmatic issue, but one of values.
This year’s survey asked 500 issuers and 500 investors across Europe, Asia, the Middle East and the Americas about their drivers for considering environmental and social issues, as well as how they are addressing impact, and disclosing on activities. Sustainable investment assets under management have increased by 34 per cent in the last two years, so the demand is there. Respondents are feeling the stakeholder pressure from customers, employees, regulators and society at large, which points to increased market participation. Two-thirds of investors expressed interest in buying their first green, social, or sustainable bond, or increase their participation in the next two years. Two-thirds of issuers expect to make substantial changes to their allocation of capital towards positive environmental or social outcomes over the next five years.
This all makes for a rosy backdrop, but there are also obstacles for both sides to move at the pace required to channel funding to solve climate goals. The New Climate Economy for instance estimate that the investment to address global infrastructure needs in a sustainable manner could amount to over USD6 trillion per year to 2030.1 Survey respondents highlight a shortage of sustainability expertise, lack of good investment opportunities, and a lack of good sustainability data as barriers.
Resolving the infrastructure challenge at the same time as achieving deep emissions reduction in all sectors needs accelerated capital deployment. The financial sector can support this process by increasing knowledge about the technologies and solutions that can deliver a carbon neutral economy by 2050. As the market for sustainable finance continues to grow and evolve, we believe environmental, social and governance factors will have an increasing impact on investors and issuers choices. This survey provides the thematic and regional insights to unlock opportunities.
1 The New Climate Economy: Unlocking the Inclusive Growth Stories of the 21st Century. August 2018 https://www.sustainablefinance.hsbc.com/reports/sustainable-financing-and-investing-survey-2019