Summary Sustainable Financing Opportunities in Asia A Review assets.kpmg.com
4,250 words - PDF document - View PDF document
One Line
Sustainable financing in Asia is growing with European issuers leading the way, offering options such as SRI Sukuk, green loans, green bonds, and sustainability-linked loans, with Malaysia leading in renewable energy projects, but facing challenges in defining criteria and data tracking, which KPMG helps to address.
Slides
Slide Presentation (10 slides)
Key Points
- Sustainable financing is gaining prominence in Asia as governments, businesses, and investors recognize the importance of environmental, social, and governance (ESG) issues.
- European issuers account for the largest regional market for sustainable finance bonds, followed by the Americas and the Asia Pacific.
- Sustainable financing options in Asia include SRI Sukuk, green loans, green bonds, and sustainability-linked loans (SLL).
- Malaysia has seen issuances of sustainable bonds/Sukuk since 2014, with support from the government and financial institutions.
- Property and infrastructure development companies are interested in tapping into sustainable finance to fund their green projects.
- Challenges in the sustainable finance industry include defining sustainable criteria/products and the availability of reliable data tracking platforms.
- Leading industry players have successfully utilized sustainable financing instruments.
- KPMG offers support in sustainable financing and green bond issuance.
Summaries
45 word summary
Sustainable financing in Asia is increasing, led by European issuers. Options include SRI Sukuk, green loans, green bonds, and sustainability-linked loans. Malaysia has had fifteen sustainable bond/Sukuk issuances since 2014, mainly for renewable energy projects. Challenges include defining criteria and data tracking. KPMG provides support.
53 word summary
Sustainable financing is growing in Asia, with European issuers leading the market. Options include SRI Sukuk, green loans, green bonds, and sustainability-linked loans. Malaysia has seen fifteen issuances of sustainable bonds/Sukuk since 2014, primarily for renewable energy projects. Challenges include defining sustainable criteria and reliable data tracking. KPMG offers support in this area.
129 word summary
Sustainable financing is gaining traction in Asia, with governments, businesses, and investors recognizing the importance of ESG issues. The Refinitiv Lipper Sustainable Finance Review showed that sustainable financing is growing in Asia, with European issuers leading the market, followed by the Americas and Asia Pacific. The options for sustainable financing in Asia include SRI Sukuk, green loans, green bonds, and sustainability-linked loans. Malaysia has seen fifteen issuances of sustainable bonds/Sukuk since 2014, primarily for renewable energy projects. The government has introduced initiatives to support these issuances. Property and infrastructure development companies are interested in using sustainable finance for their green projects. Challenges in the industry include defining sustainable criteria and reliable data tracking. Leading industry players have successfully utilized sustainable financing instruments, and KPMG offers support in this area.
445 word summary
Sustainable financing is gaining prominence in Asia as governments, businesses, and investors recognize the importance of environmental, social, and governance (ESG) issues. The Refinitiv Lipper Sustainable Finance Review for the first half of 2020 revealed that sustainable financing is gaining traction across Asia. European issuers account for the largest regional market for sustainable finance bonds, followed by the Americas and the Asia Pacific.
Sustainable financing options discussed in this thought leadership are limited to debt instruments such as SRI Sukuk, corporate green loans, green bonds, and sustainability-linked loans (SLL). SRI Sukuk is a framework used for the issuance of green Sukuk in Malaysia. Green loans are used exclusively to finance or refinance new and existing eligible green projects. Green bonds are fixed-income instruments used to raise funds for green projects. There are globally recognized standards for green bonds, such as the Green Bond Principles. Sustainability-linked loans (SLL) are a recently introduced sustainable debt instrument that is gaining traction globally.
In Malaysia, there have been fifteen issuances of sustainable bonds or Sukuk since 2014, with proceeds primarily going towards renewable energy projects. The Malaysian government has introduced initiatives such as tax deductions, grants, and tax exemptions to support sustainable bond/Sukuk issuances. Property and infrastructure development companies have shown interest in tapping into sustainable finance to finance their green or sustainable projects. The Asian Development Bank estimates that developing Asia will need to invest $1.7 trillion per year in infrastructure until 2030.
To overcome common challenges in the sustainable finance industry, corporations are encouraged to ensure the greenness of their projects, establish robust data tracking platforms, adhere to sustainable financing standards, and provide transparency in their sustainable financing management.
Leading industry players such as Stockland Corporation Limited and CapitaLand Limited have successfully issued green bonds and utilized sustainable financing instruments. Common challenges faced by issuers and other participants in the sustainable finance industry include defining sustainable or green criteria/products and the availability of reliable data tracking platforms. KPMG offers support in sustainable financing and green bond issuance, including guidance on ESG integration, debt pricing benefits, and monitoring and reporting processes.
Overall, sustainable financing is gaining traction in Asia, driven by increased attention to ESG issues. Various sustainable financing options are available, including SRI Sukuk, green loans, green bonds, and sustainability-linked loans. Malaysia has seen issuances of sustainable bonds/Sukuk since 2014, with support from the government and financial institutions. Property and infrastructure development companies can tap into sustainable finance to fund their green projects. However, challenges such as defining sustainable criteria and data tracking need to be addressed. Leading industry players have successfully utilized sustainable financing instruments, and KPMG offers support in sustainable financing and green bond issuance.
637 word summary
Sustainable financing is gaining prominence in Asia as governments, businesses, and investors recognize the importance of environmental, social, and governance (ESG) issues. The Refinitiv Lipper Sustainable Finance Review for the first half of 2020 revealed that sustainable financing is gaining traction across Asia. European issuers account for the largest regional market for sustainable finance bonds, followed by the Americas and the Asia Pacific. Sustainable financing options discussed in this thought leadership are limited to debt instruments such as SRI Sukuk, corporate green loans, green bonds, and sustainability-linked loans (SLL).
SRI Sukuk is a framework used for the issuance of green Sukuk in Malaysia. Large corporations in various industries have issued their bonds since 2018. Green loans are used exclusively to finance or refinance new and existing eligible green projects. The classification of green loans is relatively new, with global issuance amounting to around $60 billion in 2018. Green bonds are fixed-income instruments used to raise funds for green projects. The proceeds from green bond issuances are only applicable to "green" or "sustainable" projects. There are globally recognized standards for green bonds, such as the Green Bond Principles.
Sustainability-linked loans (SLL) are a recently introduced sustainable debt instrument that is gaining traction globally. These loans are allocated for general corporate purposes and are linked to a borrower's sustainability performance targets. The pricing of the loan is based on the borrower's ESG score or overall sustainability achievements.
In Malaysia, there have been fifteen issuances of sustainable bonds or Sukuk since 2014, with proceeds primarily going towards renewable energy projects. The Malaysian government has introduced initiatives such as tax deductions, grants, and tax exemptions to support sustainable bond/Sukuk issuances. CIMB Investment Bank Berhad and MIDF Amanah Investment Bank Berhad have become principal advisers in three of the sustainable bonds/Sukuk issued.
Property and infrastructure development companies have shown interest in tapping into sustainable finance to finance their green or sustainable projects. The Asian Development Bank estimates that developing Asia will need to invest $1.7 trillion per year in infrastructure until 2030. However, governments have diverted some funding previously allocated to infrastructure in response to the pandemic. To overcome common challenges in the sustainable finance industry, corporations are encouraged to ensure the greenness of their projects, establish robust data tracking platforms, adhere to sustainable financing standards, and provide transparency in their sustainable financing management.
Leading industry players such as Stockland Corporation Limited and CapitaLand Limited have successfully issued green bonds and utilized sustainable financing instruments. Stockland's green bond proceeds go towards investment in green buildings and capital projects with third-party verifiers. CapitaLand has raised funds through corporate green loans and sustainability-linked loans tied to its sustainability performance.
Common challenges faced by issuers and other participants in the sustainable finance industry include defining sustainable or green criteria/products and the availability of reliable data tracking platforms. There is also a need for standardized sustainable financing guidelines and transparency in sustainable financing management.
KPMG offers support in sustainable financing and green bond issuance, including guidance on ESG integration, debt pricing benefits, and monitoring and reporting processes. KPMG can assist with underwriter selection, designing green bond criteria and project selection processes, reviewing processes and controls, providing assurance over bond criteria, processes, and controls, and ongoing monitoring and reporting support.
Overall, sustainable financing is gaining traction in Asia, driven by increased attention to ESG issues. Various sustainable financing options are available, including SRI Sukuk, green loans, green bonds, and sustainability-linked loans. Malaysia has seen issuances of sustainable bonds/Sukuk since 2014, with support from the government and financial institutions. Property and infrastructure development companies can tap into sustainable finance to fund their green projects. However, challenges such as defining sustainable criteria and data tracking need to be addressed. Leading industry players have successfully utilized sustainable financing instruments, and KPMG offers support in sustainable financing and green bond issuance