Outlook 2022: momentum in sustainable finance

There's never been more momentum in sustainability than there is right now. The transition to net-zero carbon presents a significant commercial opportunity for all participants in the capital markets space.

At ANZ, we see considerable opportunities in sustainable finance for our customers, in particular around new ideas and innovation.

Moving into 2022, we expect ongoing regulatory activity around standards, transparency and disclosure requirements around the world, which should act as a catalyst for more borrowers to consider sustainability in their funding programs.

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We expect to see a focus from customers on maintaining industry best practise in sustainable finance in 2022, and no doubt there will be a keen eye on standardisation around data and product reporting.

The overall mix of sustainable finance products in the market will continue to diversify as more companies set public targets toward net zero emissions, looking at products in this space as a way to link their cost of capital to their sustainability performance.

In addition, at ANZ we expect to see continued growth in investor focus on the valuation of non-financial performance. As mainstream integration of environmental, social and governance factors into decision making continues, investors will increase their scrutiny on debt issuers. This will in turn will flow through to demand on deals and pricing.

At ANZ, we’re cognisant that times of change often uncover obstacles, and the pace of development in sustainable finance is likely to be an obstacle for some. Inevitably, all of our jobs will begin to require an additional ESG skillset and fluency.

As a bank, ANZ sees a role in helping simplify the complex issues in sustainability and sustainable finance, and assisting its customers in navigating the path forward.

Tessa Dann & Stephanie Vallance are Directors, Sustainable Finance at ANZ Institutional