The New Medal Table: Gold, Silver And Brown

This is the third and final part in our series on "ESG Olympics". In the first part we focused on directors' duties in setting a green agenda and in the second part we explored the regulators' response in the form of "brown penalties". In this final part we turn our focus to the potential "greenium".

Green finance

A report recently issued by the European Platform on Sustainable Finance noted that the EU needs to scale up its investment in sustainable finance by at least two-thirds by 2030 if the EU is to achieve net-zero goals.

Securitisation should be perfectly designed to make a substantial contribution to these goals by facilitating banks to free up regulatory capital and refinance lending to both wholesale and retail clients through access to the capital markets. In theory, lenders can use freed–up capital to reinvest in ESG lending, while capital markets investors can channel capital via securitisation directly to finance renewables lending.