How to play the next big trend in ESG investing: green data centers
Data centers are critical to the modern economy, and as they grow in importance there’s an “urgent need” to reduce their heavy environmental footprint, according to Barclays. The firm noted that data centers — although somewhat invisible — are the modern equivalent of a public utility, and investors shouldn’t overlook the sector. Read more
ESG Focus: Linked Finance the Next Big Thing
Sustainability-linked finance (SLF) is forecast to rise at a compound annual average growth rate of 98.32% to US$17trn within five years, according to Knowledge Sourcing Intelligence, and this article on SLF penalties is the second in a series on the subject. SLF is best understood as an incentivization structure: a “pay for success”, “penalise for failure” vehicle that provides funds that can be used for a broad range of social and environmental projects alongside traditional, operational purposes.
SLF borrowers can access these general-purpose funds, so long as they meet a set of pre-agreed sustainability key performance indicators (KPIs) and (SPTs).
So, for example, a green mortgage is just like a traditional mortgage but a condition of the loan might be that insulation and solar panels be installed, or that the design has a certain carbon quotient, or that water tanks be installed. Read more
Apicorp to invest $1bn in energy project
The Arab Oil and Gas Investment Corporation (Apicorp) plans to commit $ 1 billion to finance green energy projects as it seeks to prioritize key investments in sustainable compliance. Attiga said members of the Organization of Arab Petroleum Exporting Countries will measure the ESG footprint of all of their assets by the end of 2023. These projects will be relevant for the region in 2019. Attiga said that in an interview in Abu Dhabi, Apicorp plans to borrow under its existing $ 3 billion bond program and $ 3 billion in sukuk to fund the investment. While 2019 will focus on geographic expansion, Apicorp’s CEO also hopes to acquire assets beyond investments in oil, natural gas and energy projects. ESG Toolkit, recently released by Apicorp, ranks portfolio companies based on high, medium and low risk. Read more
Swedish Cement Crisis Could threatened Country’s Green Credential
The controversial ruling that threatens Sweden’s cement shortages has highlighted the conflict between the need to build for a greener future and laws designed to protect the environment. Cementa AB, which supplies 75% of building materials in Sweden, may be forced to close the huge factory next summer if this decision is not reversed. The final closure could delay projects from green steel plants to wind farms needed to cut the country’s carbon emissions. The case shows that Sweden needs to be more pragmatic and rethink how some courts handle environmental permits in order to have a chance to reach its goal of zero net income by 2045, said Anne Louise Loholm Klasson, Swedish director of Sweco AB, the largest architecture and engineering consulting company in Europe. According to him, the infrastructure requirements necessary for the transition to the green zone must be fulfilled by a separate specialized central authority, and not by local courts. The company has recently worked on large projects ranging from a green steel plant approved by the founder of Spotify Technology SA to an expansion of the Stockholm metro. “The licensing issue is in the spotlight,” said Lockholm Klasson. The law changed the law to allow Cementa Continuar to extract lime for cement until June 31, after a local court ruled that it should be discontinued on October 31. “This is not the abolition of the law on environmental protection, it is about finding ways to speed up the process. Loholm Klasson said. Read more