DBRS Morningstar: Banks' Push for Sustainable Finance Continues Despite COVID-19 Related Disruption

DBRS Morningstar has released a commentary discussing banks’ current approach towards sustainable finance. In particular, it discusses the adverse impact that the coronavirus (COVID-19) outbreak has had on the issuance of green bonds in 2020 to date, with volumes significantly lower compared to the same period the year before. However, we expect this disruption to be temporary as banks continue to strengthen their sustainability profile, including signing up to initiatives such as the Task Force on Climate-Related Financial Disclosures (TCFD).

Key Highlights include:
• Green bond issuance over the period January-May 2020 significantly lower compared to the year before, with banks’ issuance volumes nearly halving.
• Slowdown expected to be temporary as banks increasingly engage with their social responsibility role and encounter elevated investor pressure to better align lending activities with sustainability causes.
• Banks continue supporting sustainability initiatives, including signing up to initiatives such as Task Force on Climate-Related Financial Disclosures (TCFD).

“Green bond issuance in 2020 so far has been adversely impacted by the COVID-19 pandemic, with bank issuance nearly halving compared to the year before. Nonetheless, we expect this slowdown to be temporary as the banks increasingly engage with their social responsibility role and encounter elevated investor pressure to better align lending activities with sustainability causes.” said Lito Chousiada, Assistant Vice President.