SINGAPORE (Dec 5): In 2018 alone, about US$58.8 billion ($80.1 billion) in social and sustainability bonds were issued. The first green bond was issued by the European Investment Bank and the World Bank in 2007, and the market has grown to more than US$160 billion in issuances in 2018. This is according to Sustainalytics, an environmental, social and governance (ESG) research and rating firm, and it looks like sustainable financing is set to grow even bigger.
More than ever, companies are looking beyond conventional financing to sustainable financing, which is defined as any form of financial service that integrates ESG criteria into business or investment decisions. Guided by the UN Sustainable Development Goals (SDGs) as a benchmark for impact and for creating more demand for sustainability bonds, companies can no longer ignore the risk that climate change poses to their business, regardless of what industry they operate in.
For world-leading food and agri-business company Olam International, sustainable financing is not only the right thing to do but it also makes business sense in an industry that is most at risk from climate change. Already, the impact of climate change on agriculture is being felt: It is expected that the yields of crops, mainly grain and corn, could decrease by 50% over the next 35 years because of altered climatic conditions.