Last week we concluded an extremely successful “Sustainable Financing in Emerging Markets”. The 3-day event from 7-9 October featured 12 thought provoking panel discussions that attracted over 6,000 registrations globally.

Thank you for your participation.

Please find below is a summary of the key discussion points from each of the panels and the attached conference book with more details on each of the panels. In addition, you can replay recordings for the panels by clicking on the video links. Should you have any enquiries or suggestions on any of the panels, please feel free to reach out to our panel moderators.

It has been great experience and we are very encouraged by the participation and response. This has been great experience and very excited by the participation and response. In coming days, you will see invites for a number of upcoming events that we have been organised on topical subjects like Digital Transformation in primary markets. We look forward to your enthusiasm to actively participate.

Please do reach out and continue to engage us for opportunities to work together. Thank you for your support!

Opening Session				Replay Recording
Moderator: Roberto Hoornweg | Roberto.Hoornweg@sc.com
Sustainable finance is creating a real impact and several real examples of the impact in power generation were discussed where corporates and financial institutions have joined hands for meaningful outcomes. A gap of $2-3tn/annum is coming years for sustainable financing is estimated. Investors see companies with stronger sustainability practices will generate better risk-adjusted investment returns over the long term, and this relationship will strengthen over time. We need to be mindful of the different starting points in sustainability journeys for regions and industries. Set-up to integrate sustainability for Emerging Market companies was discussed.
Panel 1			Replay Recording
Innovation in Sustainable Finance
Moderator: Henrik Raber | Henrik.Raber@sc.com
Technology innovations will be a key driver for sustainable development. Funding these technology developments will be a crucial aspect to create impact. Investors have seen the premium ‘Greenium’ compressing over time for Sovereigns and a positive impact on the conventional curve for those adhering to SDG. Private investors discussed meaningful impacts of partnering with their investee companies with clear intent, contractual controls and an aligned philosophy.
Panel 2			Replay Recording
ESG Bond and Loan Financing
Moderator:	Rahul Sheth | Rahul.Sheth@sc.com	Mushtaq Kapasi| Mushtaq.Kapasi@icmagroup.org
The panellists represented EM issuers (DP World and CLP) of sustainability and transition bonds and loans, EM bond investors (Blackrock, Amundi, Bluebay) with well-defined ESG protocol and intermediaries (SCB) – well placed to cover the core issues on the topic. The panellists shared how each of their organisations had adapted or were adapting in the new ESG focused world. This covered how issuers had imbibed ESG as part of their DNA post their first issuance and then gone on to develop full-fledged science based climate targets. In the case on Blackrock the (de)focus on thermal coal exposure had become critical post CEO Larry’s letter to the CEO’s on climate change. Further the investors talked through how their portfolios would look to adapt to new age products – Transition bonds, SLBs, Social bonds – a diversification from green bonds. Discussions veered around differences and convergence on Sustainability linked products on the bonds and loans side. The EU taxonomy’s relevance to Asia /EM was also discussed especially with reference to investor behaviour influencing issuer action.
Panel 3			Replay Recording
Creating a Framework for Energy Transition
Moderator: Amit Puri | Amit.Puri@sc.com
A broad ranging discussion bringing together the scientific community, academia, ratings agency and commercial banks.  The scale of the problem is huge – described as depressing even – yet everyone was hopeful that by collaborating the world can effectively transition.  But Transition to what and how?  The panel explored differences in pathways and solutions and concluded that no one-size-fits-all.  What is key is that everyone works towards decarbonising and everyone has a role to play.  Highlights: The IEA set out their latest thinking from the Energy Transitions Pathway; Imperial proposed a definition of Transition Finance; MSCI set out their approach to Transition and Credit Suisse described the framework they co-created with the Climate Bonds Initiative. Broad acceptance that the scale of the issues shouldn’t lead to inaction. Frameworks and definitions and consistency are all part of the solution.
Panel 4			Replay Recording
Carbon Markets as a Catalyst for EM’s Transition to Low Carbon Economies
Moderator: Chris Leeds | Chris.Leeds@sc.com
Excellent panel discussion, which was made up of subject matter experts from across the world and from different sectors. This included aviation, project development, carbon exchanges and a China economist. China announced recently that is aims to be net carbon neutral and for emissions to have peaked by 2030. This will have a huge impact across Asia and the market for renewables. While there may be some slow down in growth due to the switch from ‘cheap’ coal to renewables, China is set to become a powerhouse for new technology that will help reduce carbon emissions. China also intends to launch a national carbon market from Jan 2021, which will be a key policy tool to reduce emissions. There are many new developments in the carbon markets and there is widespread acceptance that they will have a crucial role in reducing carbon emissions globally – this concept even now appears to be gaining traction in the US. Rapid action to scale these markets in needed so that the huge emissions reductions that are needed can occur as soon as possible. Investors, traders, developers and most importantly emitters are ready to commit to these markets. While confusion remains around role of compliance markets, at least until the international rules are finalised, private sector actors are likely to press forward with their own emissions reductions initiatives, helping to support voluntary carbon markets.
Panel 5			Replay Recording
Catalysing More Investment into Water and the Ocean Economy
Moderator: Natalie Marko | Natalie.Marko@sc.com
Our panel brought together a diverse mix of panellists across the ocean finance ecosystem, including NGOs, consulting, banking, and investing to discuss the blue economy and its investment challenges and opportunities: The ocean is a topic that is especially relevant to our footprint markets because it is the main source of economic livelihood for many people in emerging markets. Fisheries and aquaculture alone provide employment to over 10% of the world’s population, with almost all those workers employed in developing countries. If the ocean were an economy, it would be the 7th largest economy in the world in GDP terms and its asset value is over $24T. Although many understand the need for ocean finance, there are still only a small number of investible products that address this area. As such, it is one of the least-invested SDGs. The panel discussed blue bonds and future the of the blue bond market, as well as ideas for more innovative instruments. There has good progress on developing frameworks for investing in Natural Capital and the blue economy. Both the WWF’s Blue Economy Finance Principles and the EU Blue Taxonomy lay the foundation for investing in this area.
Panel 6			Replay Recording
Green Structured Finance and CLOs
Moderator:	Anna Olsen | Anna.Olsen@sc.com	Marc Freydefont | Marc.Freydefont@sc.com
We had panellists representing a spectrum of investors as well as issuers. All the panellists, by the very nature of the structured elements of the ESG CLOs have solid structuring and arranging expertise. The discussions revolved around the following broad themes: Rationale to issue ESG structured finance transactions and discussions. Typical challenges faced by issuers and investors when arranging these ESG structured credit transactions. Discussions revolved around the desired level of granularity in the portfolios (15 vs. 50 loans – where 15 loans can be re-underwritten by investors whereas 50 loans do not seem to be statistical enough and re-underwriting in not an option as too lengthy). Typical ESG metrics that investors and issuers alike are focused on, e.g. impact, sustainability, number of women entrepreneurs impacted, technical assistance and accompanying underlying microfinance borrowers towards more sustainability. Blended finance, which is the catalytic presence of ‘public’ money (e.g. governments, multilateral development bank) as well as private money, and the best timing/engagement process between these 2 major investors. State of the ESG Significant Risk Transfer market (ESG bank regulatory capital transactions); how do banks reconcile the green bond paradigm with ESG SRT transactions and the conundrum that each green loans are pulled in several directions (the obligations to have use of proceeds invested into green projects and at the same time, the necessity to issue ESG green synthetic CLOs). Loads of questions around the presence of a ‘greenium’ for structured finance transactions, the importance of the issuance format (e.g. notes vs. funds). Overall, very good engagement level by panellists as well as the audience for the ESG structured credit market, which is a nascent market.
Panel 7			Replay Recording
Market Developments in Sustainable Infrastructure and Cleantech Financing
Moderator: Alper Kilic | Alper.Kilic@sc.com
The industry is moving to better standards and getting more competitive with key technological developments leading to better efficiencies and higher specific generation. While power generation with wind and solar energy is becoming more available and commoditised, new technology including hydrogen and long-lasting battery storage will lead the new waive. There already have been significant sustainability-linked investments in developed markets. EM is following the trend closely and it is expected that the investments into wide range of sustainable infrastructure projects, including power, transportation and technology in EM will increase dramatically over the coming years. Despite this, there will be a large gap in infrastructure investments in developing markets given the requirement is c USD2th per annum over the next 20 years. Therefore, there is a key necessity for all the stakeholders, ie Governments, developers and operators, MDBs/ECAs and financiers, to work very closely and in alignment.
Panel 8			Replay Recording
Sustainable Financing in Africa
Moderator:	James Nelson | James.Nelson@sc.com	Ben Constable | Ben.Constable@sc.com
A well attended regional panel. Panellists representing DFIs, Investors in both loans and bonds, industry bodies, advisors, and a regular Soveriegn issuer provided a broad discussion with good feedback from attendees Consensus from the panel is that Africa frameworks need to be more impact and outcome focused. Plenty of borrowing could be considered green/sustainable/impact but the outcome needs to be better measured so that investors can understand the impact of their investment over time. An understanding that social impact in Africa is key to development and therefore certain asset types should be considered for impact investment e.g. roads. Issuers want to better understand the framework and costs associated with issuance whilst expecting economic benefits from sustainable/impact issuance in bond or loan form. DFIs have played a key factor in the current standards for Africa but private investors would like to see more rigorous reporting which will allow increased flow of liquidity and ultimately yield benefits to African issuers. DFIs can help to crowd in private sector financing instead of the current direct lending strategy. Local regulators need to do more to incentivise lenders/investors to focus on social impact and sustainable lending. Diversifying away from conventional funding will be critical for African issuers in the post Covid-19 era. African sovereigns that are able to build an ESG brand and demonstrate sustainability will be able to fully take advantage of the ‘hunt for yield’ and lower their cost of funding in the long term There is an expectation of more Green issuances from the region and investors appreciate that Africa is at a different place in the cycle hence use of proceeds needs to be contextualized There is a need to standardize reporting to enhance cost efficiency and to improve project benchmarking. Furthermore, the social framework standards need to be improved and contain an investment pipeline that generates returns to safeguard debt sustainability of African issuers
Panel 9			Replay Recording
Waste Management – A Significant Growth Opportunity
Moderator: Sujay Shah | Sujay.Shah@sc.com
The growth opportunity in the waste sector is very promising – of particular interest are emerging sectors like plastic waste, hazardous waste etc. There is broad ranging interest from a variety of investors (strategic and financial) from across the globe. Even LP’s have become increasingly focused on this sector as part of their ESG commitments. The key challenges are around lack of consistent policy support, differences in environmental norms as well as the fragmented nature of the sector. Compared to traditional IPP models, any approach (financing or investing) will need to take account of a complex mix of stakeholder interests. While financing is also a challenge, the availability is improving over time. To tap this opportunity, strategic investors, infrastructure funds, financial institutions as well as multilaterials will have to co-operate and help grow the market.
Panel 10			Replay Recording
Gender-Lens Investing
Moderator: Michele Wee | Michele.Wee@sc.com
The growing importance of ‘S’ in the ESG was discussed, the focus on social issues is becoming a global trend. Gender issues, human rights, diversity and inclusion are very topical Innovative financing structures like the women’s livelihood bond prove the institutional appetite for gender investing Studies on diversity at senior levels improving company performance were discussed. Importance of Data analytics and impact measurement to unlock and escalate gender lens investing
Panel 11			Replay Recording
ESG Opportunities For Post-trade Service Providers
Moderator: Margaret Harwood-Jones | Margaret.Harwood-Jones@sc.com
A great discussion on some of the key areas post-trade service providers are looking at from data to reporting and regulation. This was driven by a broad and experienced group of panellists from data providers to investors and consumers of that data from the EU to the emerging markets. These are some of the key takeaways: While we see a big difference between traditional and ESG investing today, the treatment of the two will eventually merge, making it crucial for service providers to look well ahead and be prepared. As the scope of ESG data increases, technology and co-creation will be important for investors to maintain efficiency while managing risks. As ESG reporting requirements start to pick up across the emerging markets, harmonisation of frameworks and standardisation of taxonomies should be key in these discussions to avoid creating a reporting landscape that is fragmented, producing reports that are inconsistent and not useful for investors.

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