Bank eyes growing opportunities in social and green investments
“We seek to partner in funding deals that unlock green projects and that enable social projects that reduce inequality,” said Standard Bank’s Head of Investment Banking, Marco Triebner in a note addressing the challenges of sustainable financing.
“Sustainable finance could help drive Namibia’s recovery from Covid-19 while also incentivising much-needed investments in the green economy and social development,” he stated.
Noticing the surge in interest in financial products that promote a more sustainable economy, Triebner said the Covid-19 pandemic is boosting demand for bonds that fund social projects and this trend is expected to continue.
Social bonds, which are used to finance projects focused on delivering positive social outcomes, have grown in prominence during the pandemic as investors and corporates seek to generate returns from instruments with a significant social impact.
On so-called green investments, Triebner said they expect to see a wave of decentralised green energy projects as corporates and municipalities look to secure reliable and affordable supplies while furthering their ESG agendas.
The expansion of the sustainable finance market’s growth is supported by the establishment of ESG-linked funds, sustainable indices and by an evolving regulatory environment. It is also driven by investors who are increasingly gravitating to ESG-linked assets, partly on the premise that they outperform over the long term.
“Standard Bank has recognised that sustainability-linked loans present a growing business opportunity for both the bank and its corporate clients. These instruments incentivise sustainable and responsible corporate behaviour by linking the cost of funding to the achievement of certain predetermined ESG targets,” he said.