The rapid growth in sustainable finance deals will continue in 2022, supported by the growing practice of taking environmental, social and corporate governance (ESG) issues into consideration while making asset allocation decisions, bankers and asset managers said.

The proceeds from green and social bonds are earmarked for projects with specific environmental or social benefits, while sustainability bonds finance a combination of green and social projects. The use of proceeds from sustainability-linked bonds is not restricted, but the bond coupons are linked to the achievement of certain performance targets set by issuers.

Deal volumes were “certainly going to continue to grow” in 2022, amid the rising need for companies to comply with ESG requirements and raise funds to support risk mitigation and to tap into new opportunities, said Amy Lo, the Asia-Pacific co-head of UBS Wealth Management and CEO of UBS Hong Kong.

The Swiss bank’s Asia-Pacific sustainable finance deals “could easily double in 2022” from this year, judging from its current pipeline of deals, she added.

Source: SCMP