Investors urge greater scrutiny of climate funding tools

Investors urge greater scrutiny of climate funding tools

With governments worldwide pouring billions of dollars into the transition to a low-carbon future, banks are the linchpins for financing wind, solar and other clean energy projects. But their financing tools have drawbacks that can detract from sustainability goals. Investors have been pumping money into renewable energy funding. In the first six months of 2023, $18bn flowed into environmental and social bond funds globally — nearing the $22bn garnered in all of 2022, according to Bank of America. Almost half of the sustainable bond investments flowed into European funds, BofA said. In the US, sustainable bond inflows reached $1.7bn for the year to date through June 2023, up from $819mn YTD in May.

“Green bond supply has experienced impressive momentum this year,” noted Morgan Stanley in a July report, after the first two quarters of 2023 each set records for issuance: at $176bn and $185bn, respectively.

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