At our recent global conference we held in partnership with Global Digital Finance, our keynote speaker suggested that the three major drivers for financial institution regulators and policy makers for the next few years would be ESG; recovery and building resilience from the COVID-19 pandemic; and digitalization. I could not agree more and these themes are reflected in our 2022 edition of Financial Institutions Horizons. Increasingly, ESG is the lens through which investors, consumers and regulators interact with businesses. From conscious consumption by consumers to investors who are required to disclose the environmental impact of their investments to the desire to “build back better”, ESG touches every part of our business lives. Financial institutions, and the products and services they offer, have a vital role in delivering key climate sustainability developmental goals and policies, and it has become increasingly evident that this is not a task for the public sector alone. The private financial sector is central to mobilizing capital to meet the current significant shortfall. It is vitally needed to finance long-term sustainable growth and build a low-carbon, climate-resilient and circular economy by channelling funds towards well-governed, responsible and ethical enterprises. Despite this, the securitization market trails significantly behind other capital market debt products in terms of ESG-themed issuances and we look at why that is the case and what might help make ESG securitizations mainstream.
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