With countries across the world grappling with how to fund important issues such as climate change and financial inclusion, the need for private capital to play its role has never been more important.
Yet despite the successes of the burgeoning sustainable bond market, beyond China, only a very small percentage of green and social bonds have been raised to finance emerging markets.
That’s why today we’ve issued our first Sustainability Bond focused on emerging markets – covering least, low and lower-middle income countries in Asia and Africa.
Proceeds from the bond will allow us to finance more projects aligned to the UN’s Sustainable Development Goals (SDGs), which focus on addressing global challenges such as poverty, inequality and prosperity. For example, the funds could finance clean energy projects such as wind turbines and solar panels, as well as providing smaller business lending and microfinance loans, supporting employment and growth across emerging markets.
Helping the investment gap
“As a bank that focuses on emerging markets, we’re in a unique position to bring capital to the places where it matters most. It is emerging markets’ pathway to a low carbon future that will have a major impact on the world’s ability to meet the Paris Agreement’s goal of keeping global warming below 2 degrees.
“We see growing investor interest to finance sustainable development in Asia and Africa, but this is often hampered by elevated risk perception and a lack of investable opportunities. Investing in a sustainability bond issued by Standard Chartered gives investors access to emerging market sustainable finance with the comfort of investing in a well governed UK regulated Bank.” said Daniel Hanna, our Global Head of Sustainable Finance.
The need to channel capital to emerging markets is becoming increasingly important given they face a USD2.5tn annual investment gap in meeting the SDGs. Whilst 90 per cent of SDG financing needs are covered in developed countries, only 60 per cent of the investment needs are addressed in emerging and developing regions, and as low as 10 per cent in Africa.
The latest sustainable finance development
The Sustainability Bond was developed under the Group’s Sustainability Bond Framework which was also formally launched today. This gives Standard Chartered the potential to issue further Green, Social or Sustainability bonds.
“We intend for this to be the first step in a programme of Green, Social and Sustainability bond issuance, to support our Sustainable Finance strategy and bring capital to where it matters most,” said Daniel.
This transaction comes just weeks after we launched the world’s first sustainable deposit – a product for corporate clients, the funds from which we’ll use to finance projects aligned to the SDGs in emerging markets, such as infrastructure and power.
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