Sustainable Financial Instruments

Embedding environmental, social, and corporate governance factors into investments

Sustainable Finance

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    This report will look at sustainable financial instruments as investment and funding instruments that integrate environmental, social, and governance (ESG) considerations into their design and decision-making processes...
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        <b>Overview and Types of SFIs: </b>
        Sustainable financial instruments (SFIs) integrate environmental, social, and governance (ESG) considerations, aiming for financial returns and positive sustainability outcomes. They are classified into sustainable debt financial instruments (SDFIs) and sustainable equity financial instruments, with a focus on SDFIs like green bonds and social bonds in the environmental sector.
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        <b>Issuer Motivations and Market Growth: </b>
        Companies are increasingly adopting SDFIs due to stakeholder pressure for sustainability and favorable pricing terms. Financial institutions and non-financial corporates are significant issuers, with green bonds being predominant. The global market for sustainable debt reached USD 4.2 trillion by September 2023, led by green bonds.
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        <b>Investor Demand and Regulatory Support</b>
        : Institutional investors are prioritizing sustainability, driving the demand for SDFIs. Regulatory bodies are promoting sustainable finance through incentives, supportive environments, and transparency requirements, despite the complexity of diverse regulations across regions.
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        <b>Investment Characteristics and Greenium</b>
        : SDFIs channel funds to projects with sustainability benefits and tie financial terms to achieving sustainability targets. &quot;Greenium&quot; refers to the price premium investors accept for green bonds, though it is not consistently cheaper due to transparency and reporting costs.
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        <b>Challenges and Future Impacts</b>
        : Transparency and avoiding greenwashing are crucial for SDFI subscription and achieving greenium. While SDFIs provide direct sustainability impacts and business efficiencies, lack of transparency and instances of greenwashing, like in Volkswagen&rsquo;s case, can negatively impact issuer credibility and financial terms.
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Earth-friendly biotech solutions for the textile, packaging and construction industries.

Bio-based Materials

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    This 
    report looks into bioplastics that have emerged recently as an alternative to fossil-based plastics with a focus on better bio-degradability.
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Bioplastics

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        Technological, social, and cultural innovation are continuously shaping the F&amp;B landscape
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        F&amp;B incumbents are turning to innovative startups to help reach their sustainability targets
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        What are they investing in? Who are they partnering with? What acquisitions are taking place?
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EDGE Insights