Rapid growth would be observed in the Sustainability-linked finance market as per the publication of a new report on “Global Sustainability-linked Finance Market Forecasts from 2021 to 2026” by Knowledge Sourcing Intelligence.
The Global Sustainability-linked Finance Market is expected to reach a market size worth US$17,311.992 billion by 2026. As elaborated by Knowledge Sourcing Intelligence analysts, the prime factors driving the growth of the Sustainability-linked Finance market are the increasing need for reducing the carbon footprint of different stakeholders, and the favorable structural characteristics of the instruments.
Green Finance refers to the initiatives taken by private and public agents such as banks, governments, international organizations in developing, promoting, and implementing sustainable development projects and initiatives through financial instruments.
Sustainable loans are the financial instrument under which the proceeds are to be used only for sustainable purposes, the incentives depend on the outcome of the specified sustainable project. Green finance and sustainable loans do not provide flexibility of use of proceeds to lender/borrower giving light to sustainability-linked finance.
Sustainability-Linked financing refers to the performance-based financial instruments that put no restrictions on the use of financing provided through sustainability-linked channels and allow the issuer or borrower to utilize the funds for any specified purposes. Sustainability-linked financing allows companies to improve their sustainability performance and provides an opportunity to leverage sustainability disclosures to access a rapidly growing credit market funded through sustainability-linked financing.
Key findings of the Sustainability-linked Finance Market report:
- Sustainability-linked loans are expected to have a major share in the year 2019 and sustainability-linked bonds are expected to skyrocket by 2026 owing to the increasing adoption of sustainability by all stakeholders
- External ESG rating is expected to have a notable market share because of the inclining focus of corporates on sustainability fueled by the resultant positive effect on brand image.
- The adoption of sustainability-linked finance in the utility sector is estimated to grow to attribute to its pollution-causing activities, which are not sustainable in the longer run.
- Europe is predicted to dominate the market owing to the various government initiatives and policy decisions
The Sustainability-linked finance market growth is mainly facilitated by the interest of the youth population towards products and services offered by environmentally sustainable companies, support by financial institutions to provide sustainability-linked finance, adoption of the Equator Principles as a primary tool for managing ESG risks, UN Principles for Responsible Investment incorporating ESG issues into investment practice, and other factors like change in demand and supply of climate reporting, the push to better climate change risk management, and advances in reporting and risk analysis.
The sustainability-linked finance market report answers the following questions:
- What is the size of the sustainability-linked finance market?
- Which factors drive the growth of the market?
- Which financial instruments can be linked to the sustainability performance of the borrowing/ lending company?
- Which options are available to evaluate the performance of the company?
- Which end-user industry holds the largest share in the sustainability-linked market?
- Which geographical region dominates the market and why?
This report is beneficial for:
- The corporate companies considering the lending or borrowing finance through a sustainability-linked financial instrument
- The financial institutions wanting to evaluate venturing into the sustainability-linked loan market
- The third-party organizations desiring to know about the opportunities in the market to facilitate sustainability-linked finance transactions
- Individual investors considering investing in the companies that have adopted sustainability-linked finance
The Knowledge Sourcing Intelligence team has conducted extensive research on all the aspects related to the growth of the sustainability-linked finance market. The analysts of the Knowledge Sourcing Intelligence team have researched every factor associated with sustainability-linked finance. That analysis is sophisticatedly incorporated with 90+ data tables and figures. The short, medium and long term effect of each driver, restraint, and opportunity is studied in the report. For conclusive research on the fairly recently emerged market, the historical perspective has been studied. The technical aspect of both sustainability-linked instruments is explained inclusively for vivid understanding. Current trends, ongoing developments, regional insights, and competitive prospects are some of the significant parameters covered in this report. The report also has details about the impact of COVID-19 on the sustainability-linked finance market. The company profiles for all the three stakeholders – Borrowing and lending companies, financial institutions, and third-party organizations involved in the market are mentioned in the report.
View a sample of the report or purchase the complete study at https://www.knowledge-sourcing.com/report/global-sustainability-linked-finance-market
This analytics report segments the Sustainability-linked Finance market on the following basis:
- By Instrument Type
- Sustainability Linked Loans (SLLs)
- Sustainability Linked Bonds (SLBs)
- By Performance Metric
- External ESG Ratings
- Internal KPIs
- By Sector
- Transport & Logistics
- Food & Beverage
- By Geography
- North America
- South America
- Nordic Region
- Middle East and Africa
- Asia Pacific