Sustainaweekly - ESG bank bond issuance on the up
In this edition of the SustainaWeekly, we start by focusing on recent trends in ESG bank bond issuance. Issuance with this label has picked up in May, with the share in total issuance rising to 20%. We go on to assess decarbonisation options for international shipping, and conclude that unfortunately they all have drawbacks. A similar story is the case with regards to decarbonisation options for the steel industry for the longer term, where further development of breakthrough technologies is essential. Meanwhile, we look into the European Parliament’s rejection of the Commission’s ETS reform proposals and the way ahead now. Finally, we discuss the emission trend of greenhouse gases in the steel industry and come up with an indicative emission trend based on data from the World Steel Association and the monthly production figures. The steel industry still has a long way to go in reducing greenhouse gas emissions and ultimately, low-carbon breakthrough technologies remain critical.
Strategy Theme:
The issuance of euro bank bonds in ESG format picked up in May after a slowdown in April. This party reflected a more general rise in issuance of euro bank debt, although the share of ESG labelled bonds rose to 20% in May, which was well above the average share in the first four months of 2022. SNP led the way, followed by covered bonds.Economics Theme:
International shipping has various ways to reduce its carbon footprint, however all currently have significant drawbacks. A change in energy carrier is the most crucial step to take but the future shipping fuel of choice has not been defined yet resulting possibly in reluctance to replace old vessels.Policy & Regulation:
The European Parliament voted against the proposed plans of EC to reform the ETS. Despite the rejection the impact on the ETS price was rather limited. It has been sent back to the Environmental Committee to renegotiate the proposal, with a further delay to implementing the reforms to the EU ETS as a part of the Fit-for-55 plans likely.Company & Sector news:
The steel industry is responsible for about 4-5% of total global CO2 emissions. To further reduce greenhouse gas emissions in the steel sector, many opportunities are already available, but the further development of breakthrough technologies remains essential.ESG in figures:
In a regular section of our weekly, we present a chart book on some of the key indicators for ESG financing and the energy transition.