SustainaWeekly - Industry’s reaction to the gas crisis
In this edition of the SustainaWeekly, we focused on industry’s reaction to the gas crisis. Looking at data for the first half of this year, it is extraordinary to see the sector continuing to grow, despite a collapse in gas consumption. At this stage we do not have sufficient data to breakdown the drivers behind this divergence. The positive take would be that industry has managed to step up its energy efficiency, which would be a boost for the transition as well as helping the sector to financially cope with the crisis. However, there is also a good deal of evidence that companies have switched to other fossil fuels, especially oil, which of course would not be a step forward. Our second topic is a review of last week’s ESG bond issuance. We look at some of the trends in bank green bond issuance, as well as how investors reacted to utility bonds against the background of proposals for a power price cap.
Sectors:
Despite gas consumption falling sharply in industry in the first half of this year, the sector's output continued to increase. Greater energy efficiency and diversifying the energy mix (especially more oil) are key measures that industrial companies have employed to mitigate high gas prices.
ESG Bonds:
The euro bank debt market welcomed three green deals last week, split between covered bonds, senior preferred and senior non-preferred debt. The latter two saw green issuance from somewhat smaller banks in the periphery, which in the end also needed to pay relatively large new issue premiums.
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.