Topic

Countries within emerging markets have regional contexts that influence sustainable finance trends. Each country requires a unique approach to encourage growth within the sustainable finance market.

August 25, 2022

From Zero to Hero: On the Enablers and Barriers for Sustainable Finance in Emerging Markets

Below is an excerpt from ISS ESG’s recently released paper “From Zero to Hero: On the Enablers and Barriers for Sustainable Finance in Emerging Markets”. The full paper is available for download from the Institutional Shareholder Services (ISS) online library.

KEY TAKEAWAYS

  • Over the 2020 – 2021 period, Green Bond markets in APAC and LATAM had a faster growth rate than established markets in Europe, but lagged in volume.
  • COVID-19 led to growth in social and sustainability (S&S) issuances globally, but especially in emerging markets.
  • Most dynamic emerging market actors are supported by strong governance initiatives and large regional / global companies that can kick-start sustainable finance issuances.

Second-Party Opinion Market Opportunities

Issuers in emerging markets often need transition finance instruments, such as detailed Use of Proceeds and Sustainability-Linked Bond/Loan Second-Party Opinions (SPOs) to support issuers’ sustainable finance initiatives. Issuers that do not employ popular market standards or certifications may also be interested in a bespoke approach. Some recent samples of ISS ESG projects aimed at emerging market issuers are listed in Table 4.

ISS ESG Second-Party Opinion Projects, by Region

Latin AmericaAfrica & the Middle EastAsia Pacific
Fondo MiVivienda (Peru) GCC (Mexico) Orbia and BANCOMEXT (Mexico) SMI Group (Peru) Suzano and Movida (Brazil) SQM (Chile) Transmilenio (Colombia) and many othersAfrica Finance Corporation (Supranational) TUHF (South Africa) First Abu Dhabi Bank (United Arab Emirates) and many othersBiotech Listings (Malaysia) Yinson Holdings Berhad (Malaysia) Adani Green Energy Limited (India) UltraTech Cement (India) and many others

Source: ISS ESG

The ISS ESG SPO team is expanding continuously to better serve issuers in all regions and in different languages. ISS ESG team members can work in English, Spanish, Portuguese, Mandarin, Japanese, Arabic, Cantonese, Hindi, Dutch, French, Swedish, German, and Italian.

Explore ISS ESG solutions mentioned in this report:

  • Use ISS ESG’s Second Party Opinion (SPO) Services to provide sustainability, green and social bonds with a credible and independent assessment of their sustainability quality.
  • Financial market participants across the world face increasing transparency and disclosure requirements regarding their investments and investment decision-making processes. Let the deep and long-standing expertise of the ISS ESG Regulatory Solutions team help you navigate the complexities of global ESG regulations.

By: Andrea Torres, Associate – ESG Consultant, ISS ESG
Allen Ng, Associate – ESG Consultant, ISS ESG
Armand Satchian, Senior Associate – ESG Consultant, ISS ESG

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