SFI Master Classes

ESG compliant assets are projected to grow, and reach USD 53 trillion by 2025—a third of total assets under management. While the interest in sustainable investing initially focused on public equity markets, it is now evolving into fixed income. More and more issuers and investors are showing an interest in sustainable debt, and there have been substantial flows into sustainable investment–grade and high-yield strategies recently. This rapid growth of the market for sustainable debt raises several questions. How has the market for sustainable debt evolved and where is it now? What are the effects of sustainable debt on the financial and environmental performance of issuing firms? How do we prevent greenwashing? In what ways can the market standardize ESG products and improve transparency? Do ESG ratings matter to debt investors? Who pays for improvements in sustainability performance, issuers or investors?

Objectives

Building on industry practice and recent academic insights, this Master Class will provide participants with an in-depth understanding of sustainable debt. Using the latest available data, the co-presenters will discuss implementation approaches and both the opportunities and the shortcomings of current practice. Overall, the Master Class aims to equip banking and finance professionals with up-to-date, relevant, high-level knowledge about sustainable debt. The specific objectives are:    

• Becoming familiar with the institutional details of sustainable debt structures and getting up to speed with recent trends in the sustainable debt market.
• Examining the effects of sustainable debt—from green and social bonds to sustainability-linked loans—and the financial and sustainability performance of issuers and borrowers.
• Understanding the differences and trade-offs in use of proceeds and sustainability-linked structures and how the design of sustainable debt can help to avoid greenwashing.
• Investigating who pays for sustainability, and understanding the ESG ratings landscape.
• Analyzing best-in-class approaches to ESG reporting and the need for transparency.
• Understanding, through a case study, the potential for issuing sustainable debt.

Target Audience

Corporate finance (M&A, credit finance and loans, capital market finance, financing of firms and projects), investment banking, and asset management professionals. The focus is on enabling participants to understand the evolving market for sustainable debt.

SAQ Recertification

This SFI Master Class is an acknowledged SAQ recertification measure for CWMA, CCoB, Affluent-, SME-, and Individual Client Advisor profiles and comprises four learning hours (4 credits).