ANZ Sustainable Finance Insights, Q2 2023

Quarterly highlights  |   Market update  |   Notable transactions  |   Sustainability developments and updates  |   ANZ updates  |   Sustainability events  |   ANZ contacts

Market update

All market data are sourced from BloombergNEF as at 30 June 2023 and include original and tapped issuance, unless otherwise noted.

• Global green, social, sustainability and sustainability-linked (GSSS) bond and loan issuance declined 9.6% q/q to USD340.6bn in Q2 2023 (Graph 2).
  
  
• This was the lowest quarterly GSSS issuance since Q4 2020, which may reflect a confluence of factors. The global economy continued to slow, as central banks pushed policy rates higher in the face of still-too-high inflation. Recession risks remained elevated; some economies have already experienced mild technical recessions, although the damage to labour markets, households and businesses has been limited so far. Credit conditions tightened in the wake of the banking sector issues earlier in the year. Developments in climate and sustainability regulations and standards may be taking both borrowers and investors some time to digest and greenwashing concerns have become more acute.
  
  
• Structural drivers of the sustainable finance market remain in place. The funding requirement for the energy transition is immense. Regulatory, policy and social pressure on governments, corporates, and institutions to set and achieve emissions reduction targets and other environmental and social commitments continues to grow (with some exceptions). And the market’s initial focus on climate is broadening to encompass other themes, such as nature. These structural drivers will continue to put upward pressure on issuance over the longer-term in the face of the cyclical and temporary drags.
  
  
• Cumulative global GSSS issuance stood at USD6.58tn as at 30 June 2023.

Graph 2: Global Sustainable Debt Market by Product by Quarter

{CFINFOGRAPHIC: graph2-global-sustainable-debt-market-by-product-and-quarter.svg}
Source: BloombergNEF, ANZ

• Sovereign green bonds are on track for record annual issuance in 2023, as governments increasingly look to fund their Paris Agreement and other environment commitments and boost their climate and sustainability credentials. Sovereign green bond issuance hit USD77.3bn in H1, almost double the H1 volumes of the previous two years (Graph 1). A EUR10.0bn (USD11.0bn) new green bond issued by the Italian government was the largest in H1, with other sizeable transactions by the German, UK, Irish and Austrian governments.
  
  
• Sovereign sustainability bond issuance is also on track for a record year after a sharp rise in Q2, on the back of a new USD2.9bn bond by Mexico and USD4.5bn in tap issues by Peru.
  
  
• The increased number of use of proceeds transactions by sovereign issuers in H1 2023 has funnelled additional funding towards green projects, with most green project categories seeing an increase in the number of transactions targeting them (Graph 3). Renewable energy, energy efficiency and clean transportation were the most common project categories targeted. In contrast, social project categories, which tend to be less popular, dropped off in H1 2023.

Graph 3: Number of Sovereign Use of Proceeds Transactions Targeting Eligible Project Categories*

{CFINFOGRAPHIC: graph3-number-of-sovereign-use-of-proceeds-transactions-target-ingeligible-project-categories.svg}
* Many transactions target multiple project categories
Source: Bloomberg, ANZ

• Total green bond issuance hit a record in H1 2023, bucking the downward trend in the overall sustainable debt market (Graph 2). This was in part due to the surge in sovereign green bond issuance. In Q2, green bond issuance accounted for 55.5% of the overall sustainable debt market, the highest share in five years. Sustainability bonds are also tracking ahead of where they were this time last year but are down on their 2021 run rate.
  
  
• Social bonds were the only format to record a quarterly increase in Q2, rising almost 20% q/q to USD44.0bn. This was a two-year high in quarterly issuance but still well off the pace of late-2020 and H1 2021 when governments were funding their COVID support response. Green loans tumbled to USD5.7bn, the lowest level since 2015, accounting for less than 2% of the sustainable debt market.
  
  
• Sustainability-linked issuance dropped sharply over the past year to USD55.5bn in Q2 2023, the lowest since Q3 2020 (Graph 4). This was driven by a steep downturn in sustainability-linked loans (SLLs). Concerns around integrity and incentives in the SLL market have been raised, including by the Financial Conduct Authority, the UK's financial services industry regulator (see Sustainability developments and updates from the regulatory and legal environment).

Graph 4: Global Sustainable Debt Market, Use of Proceeds vs Sustainability-linked Products

{CFINFOGRAPHIC: graph4-global-sustainable-debt-market-use-of-proceeds-vs-sustainability-linked-products.svg}
Source: BloombergNEF, ANZ

• Asia has cemented its position as the second-largest sustainable debt issuer, with almost 28% of the market in Q2 2023 (Graph 5). Europe remains the clear leader, accounting for almost 48% of total issuance in Q2. North American issuance has trended downward since mid-2021 to USD36.1bn in Q2 2023, the lowest quarterly volume in three years, to account for less than 11% of the market.
  
  
• South American issuance jumped to its third highest quarterly result on record. This came on the back of the Government of Chile issuing new sustainability-linked bonds (see Sustainability developments and updates from the regulatory and legal environment) and tapping social bonds, and the Government of Peru tapping two sustainability bonds.

Graph 5: Global Sustainable Debt Market by Region by Quarter

{CFINFOGRAPHIC: graph5-global-sustainable-debt-market-by-region-by-quarter.svg}
Source: BloombergNEF, ANZ

Notable transactions

ANZ continues to support customers to access the sustainable finance market. Selected notable recent transactions supported by the ANZ Sustainable Finance team include:

Australia

• Western Australian Treasury Corporation (WATC) priced a AUD1.9bn 10-year inaugural Green Bond, becoming the fourth Australian state funding agency to fund in green, social and sustainability format. ANZ acted as Joint Sustainability Coordinator and Joint Lead Manager. Strong demand for green format resulted in an order book with 3x oversubscriptions at final price, with over 60 investors. WATC CEO, Kaylene Gulich, and ANZ Executive Director, Bronwyn Corbet, discuss the transaction in this podcast.
  
  
• Growthpoint Properties Australia converted AUD520m of debt to Sustainability-Linked Loan format in its inaugural sustainable finance transaction. ANZ acted as Sole Sustainability Coordinator for the transaction which focused on the reduction of Scope 1, 2 and 3 emissions and improved performance within industry benchmarks such as the Global Real Estate Sustainability Benchmark (GRESB) and National Australian Built Environment Rating System (NABERS).
  
  
• The European Investment Bank (EIB) issued a AUD450m 10-year Fixed Rate Kangaroo Sustainable Awareness Bond with eligibility including environmental and social objectives. ANZ acted as Sole Lead Manager. This transaction follows EIB’s AUD1.5bn Climate Awareness Bond earlier in the year, on which ANZ acted as Joint Lead Manager.
  
  
• The World Bank (IBRD) issued a AUD340m 10-year Kangaroo Sustainable Development Bond Raising Awareness for Biodiversity. ANZ acted as Sole Lead Manager. This was IBRD’s first 10-year AUD transaction since 2020 and the first AUD bond that raises awareness for the World Bank’s strategy, projects, and programs that support developing countries in the sustainable management of biodiversity and ecosystem services and integrating nature in development.
  
  
• Mulpha secured a AUD160m Syndicated Green Construction Loan for Stage 1 of its Norwest Quarter Project, jointly funded by ANZ and the Clean Energy Finance Corporation (CEFC) . ANZ acted as Sustainability Coordinator. This will be a sustainable residential development of 196 apartments that consume 50% less electricity from the grid with an average 7-star NatHERS (Nationwide House Energy Rating Scheme) rating.
  

New Zealand

• New Zealand Local Government Funding Agency Limited (LGFA) issued NZD1.1bn of Unsecured, Unsubordinated, Fixed Rate Sustainable Financing Bonds. ANZ acted as Joint Lead Manager. Net proceeds of the sustainable financing Bonds are to be used for sustainable loans to local councils and council-controlled organisations under the Green, Social and Sustainability (GSS) Lending Programme and the Climate Action Loans (CALs) Programme.
  
  
• KMD Brands Limited successfully refinanced its existing debt facilities with NZD310m of syndicated sustainability-linked multi-currency revolving facilities. ANZ acted as Sole Lead Arranger and Sole Sustainability Coordinator. Borrowing costs of the new facility are linked to achievement of targets including emissions reduction, continued B Corp certification, and improving transparency around the wellbeing and labour conditions of workers in the supply chain. This transaction marks the continuation of KMD’s sustainable finance program with its second sustainability-linked loan structure and first sustainability-linked bank guarantee, which is also believed to be the first sustainability-linked bank guarantee facility in the New Zealand market.
  
  
• Mercury NZ Limited issued a NZD150m 5-year Unsecured Unsubordinated Fixed Rate Green Bond. ANZ acted as Arranger, Green Bond Coordinator and Joint Lead Manager. The proceeds of the green bonds are earmarked to finance or refinance new or existing projects and expenditures relating to renewable energy and other eligible projects, in accordance with Mercury’s Green Financing Framework. The transaction was oversubscribed thanks to strong demand.
  

International

• Oversea-Chinese Banking Corporation (OCBC) issued AUD1bn of 3-year Green Senior Unsecured Floating Rate Notes (FRN). ANZ acted as Joint Lead Manager and Bookrunner. The issuance was only the second time an Asian bank has issued a green bond this year. Proceeds will be used to finance or refinance new or existing qualifying assets under the OCBC Sustainability Bond Framework.
  
  
• Pertamina Geothermal Energy (PGE) successfully raised USD400m of 5-year 144a/RegS Green Senior Unsecured Bonds, which were 8.25 times oversubscribed. ANZ acted as Joint Lead Manager and Bookrunner. The transaction marks PGE’s debut global bond following its recent initial public offering. It was also the first green issuance from a sovereign-linked corporate in Indonesia. PGE has been raising capital to expand its installed geothermal capacity and support the Indonesian government’s net zero ambitions.
  
  
• Hong Kong Air Cargo Terminals Limited (HACTL) successfully closed a 5-year HKD1.5bn Sustainability Linked Loan. This was ANZ’s inaugural sustainable financing mandate for HACTL. ANZ was Lead Sustainability Coordinator and provided end-to-end financing solutions with selected sustainability performance targets aligned to HACTL’s overall sustainability strategy. ANZ also acted as Mandated Lead Arranger.
  
  
• PAG established the largest Sustainability-Linked Facility for a private credit fund in Asia-Pacific. ANZ acted as Joint Sustainability Coordinator and led the development of the sustainability-linked finance framework following market best practice and global standards. The framework provides guidelines for PAG’s private credit funds to incorporate sustainability-linked attributes into its financing activities, with the interest rate margin tied to performance across four ESG-related key performance indicators.

Sustainability developments and updates from the regulatory and legal environment

Global

• The International Capital Market Association (ICMA) published updated versions of the Climate Transition Finance Handbook (CTFH), Sustainability-Linked Bond Principles (SLBP), and accompanying Key Performance Indicator (KPI) registry.
  
  
  • The 2023 edition of the CTFH includes updated guidance and disclosure requirements for emissions reduction and added guidance for climate transition-themed bonds targeted at ‘hard-to-abate’ sectors, reflecting market developments and expectations. The focus is on transition as a theme rather than a label.
    
  • The SLBP update features new guidance and metrics specific to sovereign issuers, to facilitate sovereign SLB issuance, and an expansion of the KPI registry to include more metrics focussed on social issues, a just transition and value chains.
    
  • Other updates include an increased focus on target population identification and guidance for impact reporting for Social Bonds, recommendations and metrics for impact reporting for green bonds, and a revised mapping to the SDGs.
    
  • The 2023 Annual Conference of the Green, Social, Sustainability and Sustainability-Linked Bond Principles held in Singapore on 28 June covered these key updates (see Sustainability events and key dates).
    
    
• The International Sustainability Standards Board (ISSB) released its first two IFRS (International Financial Reporting Standards) Sustainability Disclosure Standards: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. The standards provide a high-quality, comprehensive global baseline for sustainability disclosures and are effective for annual reporting periods beginning from 1 January 2024. The ISSB does not mandate use of the standards and lets jurisdictional authorities decide whether to mandate use.
  
  
• The Science Based Targets Network (SBTN) published corporate science-based targets for freshwater and land. These targets directly support biodiversity protection and complement Science Based Targets Initiative (SBTi) climate targets. SBTN provides methodology, tools and guidance for businesses to assess and prioritise their impacts on nature and set ambitious targets to address them. A pilot group of 17 companies plans to set SBTN-recommended targets this year.
  
  
  • The freshwater targets focus on 1) freshwater quantity, specifically withdrawals from surface bodies and groundwater, and 2) freshwater quality, specifically nitrogen and phosphorus pollution entering surface bodies.
    
  • The land targets are 1) halting conversion of natural ecosystems, 2) freeing up agricultural land for increased ecological productivity, and 3) improving the ecological condition of landscapes, including working lands, to enhance ecosystem structure, composition, and function and the social systems that depend on such landscapes.
    
    
• SBTi published three new draft resources for the financial sector. These focus on setting credible net-zero targets, both near- and long-term, for financial institutions and aligning these targets with 1.5°C pathways (previously well-below 2°C). There are also proposed criteria on financial institutions’ interaction with fossil fuel companies. Public consultation on the draft resources is open until 14 August 2023.
  
  
• Climate Bonds Initiative (CBI) launched a new Certification Scheme for sustainability-linked bonds, assets and entities. It is the fourth version of the Climate Bonds Standard. The Scheme was previously only available for use of proceeds debt instruments such as green bonds. This extended Scheme aims at supporting the transition to a low carbon economy, with CBI certification now also available to non-financial organisations with strong transition plans that are aligned with 1.5°C pathways as well as those transitioning towards alignment with 1.5°C pathways by 2030.
  

Australia

• At the Australian Government’s second Investor Roundtable, the Government committed to:
  
  
  • The introduction of a Sovereign Green Bonds program. This will enable the government to raise funds for projects with climate and/or environmental benefits, offer investors a stake in public projects that align with their climate and environmental objectives, and demonstrate the government’s commitment to achieving its emissions reduction and environmental targets. The Australian Office of Financial Management (AOFM) plans to issue Australia’s inaugural sovereign green bond in 2024, following development of a Green Bonds Framework, in respect of which NAB and UBS have been appointed advisors.
    
  • Co-funding the development of an Australian sustainable finance taxonomy with the Australian Sustainable Finance Institute (ASFI), with AUD1.6m of funding allocated in the 2023-24 Budget. This will facilitate Australia’s net zero transition by increasing the credibility of Australia’s sustainable finance market and supporting investor decision-making in allocating capital to clearly defined climate and environmental activities.
    
  • The expansion and upgrade of the Nationwide House Energy Rating Scheme (NatHERS) to apply to existing residential properties.
    
  • An extra AUD4.3m funding for the Australian Securities and Investments Commission (ASIC) for surveillance and enforcement against misleading claims about the sustainability and/or efficiency of corporate products.
    
    
• The Australian and New Zealand Governments agreed to align sustainable finance frameworks and tools at the inaugural Australia–New Zealand Climate and Finance Ministers’ Meeting in June in Wellington. Aligning frameworks, including taxonomies, will make it easier and clearer for businesses, investors and governments working across both countries to participate in the sustainable finance market. Ministers also agreed to establish a Net Zero Government Working Group and work together on increasing electric vehicle (EV) uptake, developing Guarantee of Origin Schemes, and improving monitoring and disclosure.
  
  
• Ministers also acknowledged that First Nations and Māori people in Australia, New Zealand and the Pacific are disproportionately impacted by climate change and have valuable knowledge to contribute to taking action on climate change. On this front, the UN Framework Convention on Climate Change (UNFCCC) Local Communities and Indigenous Peoples Platform (LCIPP) Pacific Regional Gathering later in the year will provide an opportunity for First Nations and Māori people to positively contribute through knowledge sharing and dialogue with governments from the region.
  
  
• The 2023-24 Australian Federal Budget included AUD4.6bn in climate-related spending commitments out to 30 June 2030 (Table 3.7, Budget Paper 1), adding to the AUD24.9bn in the October 2022-23 Budget.
  
  
  • The headline items were concentrated in the sub-category Reducing emissions in Australia’s energy system and broader economy and included AUD2.0bn for the Hydrogen Headstart program, AUD1.3bn for the Household Energy Upgrades Fund, and AUD314m through the Small Business Energy Incentive.
    
  • The Budget also allocated AUD83m for the establishment of a Net Zero Authority. The Authority’s objectives are to mitigate negative impacts of the net zero transition on workers, regions and communities and to help them, along with investors and companies, realise its opportunities. The government also allocated AUD400m from the Powering the Regions Fund to support existing and new industries through the net zero transition.
    
    
• The Australian Government announced a full audit of environmental offsets, covering more than 1,000 offset sites, to improve compliance and ensure the ongoing integrity of produced offsets. The audit falls under the Government’s Nature Positive Plan and is commencing ahead of the introduction of a package of new national environmental legislation to Parliament by the end of the year. The package will include proposals for National Environmental Standards and the establishment of an independent Environment Protection Agency.
  
  
• The Australian Government indicated that mandatory climate reporting requirements will commence from 1 July 2024 for large listed and unlisted companies and financial institutions in Australia. The Australian Accounting Standards Board (AASB) will develop detailed disclosure standards for Australia in close alignment with the ISSB’s final standards (see Global above). The second consultation on climate-related financial disclosure closed on 21 July.
  
  
• The Victorian Government brought forward the deadline to end native logging in the state to 1 January 2024 from 2030. The 2023-24 Victorian Budget allocated an additional AUD200m to support timber industry workers and affected communities through the transition.
  

New Zealand

• Aotearoa New Zealand’s Government Budget 2023 aimed to “better address the risks and realise the opportunities presented by climate change, by supporting households to reduce emissions, accelerating our transition to a low emissions and climate-resilient economy and building our resilience to climate change and its impacts”. NZD1.9bn was allocated to emissions reduction and climate adaptation measures via the Climate Emergency Response Fund (CERF). This funding included NZD403m to expand the Warmer Kiwi Homes programme and NZD120m to expand EV charging infrastructure.
  
  
• The Ministry for the Environment recently opened its latest public consultation on changes to New Zealand’s Emissions Trading Scheme (ETS), following various previous amendments. The aim of the current review is to revise the scheme so there is greater incentive to reduce greenhouse gas emissions rather than just offset them. In the meantime, the first two auctions of 2023 saw no New Zealand Units (NZU) sold by the Government. The Budget provided NZD38m for ETS design and centralised exchange for NZU trading.
  
  
• The Climate Change Commission (CCC) released its draft advice on the Government’s second emissions reduction plan, covering the 2026-2030 emissions budget. The key message is that New Zealand needs to build on its momentum to meet its climate change goals. The advice proposes 19 recommendations including committing to a specific level of gross emissions and ensuring a fair, inclusive and equitable transition for New Zealanders. Public consultation closed on 20 June, and the final version of the advice is due by 31 December 2023.
  
  
• Stakeholder-led climate scenarios for Aotearoa New Zealand economic sectors are being developed, ahead of the Mandatory Climate-Related Disclosures expected to be published from 2024 onwards. Three were finalised in the quarter:
  
  
  • the Climate Scenarios for the Construction and Property Sector under the New Zealand Green Building Council (NZGBC);
    
  • Agriculture Sector Climate Change Scenarios under the Aotearoa Circle;
    
  • and Climate Scenario Narratives and Guidance for the Financial Services Sector under the Financial Services Council NZ.

Each lays out three scenarios: Orderly, Disorderly (‘Too Little Too Late’ for the Financial Services Sector), and Hot House World. These scenarios followed the Marine Scenarios Report and Tourism Sector Climate Change Scenarios, first published under the Aotearoa Circle, with some scenarios complemented by adaptation roadmaps.

Asia

• The People’s Bank of China (PBoC) and Monetary Authority of Singapore (MAS) announced a China-Singapore Green Finance Taskforce. The Taskforce held its inaugural meeting on 21 April and will focus on interoperability of the Singaporean and Chinese sustainability taxonomies, improving connectivity between the Chinese and Singaporean sustainable finance markets, and technology use in sustainable finance.
  
  
• MAS launched the Finance for Net Zero (FiNZ) Action Plan which expands the scope of its 2019 Green Finance Action Plan to reflect the increased focus on transition finance. The FiNZ Action Plan has four strategic objectives: improve climate data and disclosures; ensure a climate resilient financial sector; support the development of credible transition plans; and promote credible green and transition products and markets. Under the latter objective, MAS allocated SGD15m for expansion of the sustainable bond and loan grant schemes to include transition bonds and loans. The existing schemes have been revised and extended by five years to 31 December 2028.
  
  
• The Hong Kong Monetary Authority (HKMA) proposed a green taxonomy for the city, based on the EU-China common ground taxonomy. This would help develop the green finance market and interoperability in the Guangdong-Hong Kong-Macao Greater Bay Area. The proposed structure and core elements of the framework have been developed by CBI. Consultation on the discussion paper closed 30 June.
  
  
• The Hong Kong Stock Exchange proposed mandatory climate-related disclosures in ESG reports from 1 January 2024. This would tighten the current ‘comply or explain’ requirement and align with the recently released standard from the ISSB (see Global above).
  
  
• The second version of the ASEAN Taxonomy for Sustainable Finance was released with updates on interoperability with other taxonomies, including the EU Taxonomy, and a focus on the role of coal phase-outs in meeting emissions reduction targets.
  
  
• The Reserve Bank of India (RBI) released a framework for acceptance of green deposits. The framework aims to encourage regulated entities (such as commercial banks) to offer green deposits to customers, in turn enabling customers to reach their sustainability objectives and boosting credit flows to green projects.
  

Europe

• The European Commission released a package of sustainable finance measures, including:
  
  
  • New criteria for economic activities in the EU Taxonomy under four non-climate objectives: sustainable use and protection of water and marine resources; transition to a circular economy; pollution prevention and control; and protection and restoration of biodiversity and ecosystems.
    
  • Proposed regulations for ESG ratings providers, to address the current lack of transparency.
    
  • Guidance on the facilitation of transition finance.
    
    
• The Financial Conduct Authority, the UK’s financial services industry regulator, flagged potential measures to improve the integrity of the SLL Market. This came in response to concerns around credibility and integrity in the market, greenwashing, conflicts of interest, and weak incentives.
  
  
• The UK and French Governments released the UK-French Global Biodiversity Credits Roadmap. The roadmap aims to improve nature outcomes by scaling up global support for businesses buying credible biodiversity credits. The supporting Advisory Panel aims to have actionable recommendations in place by UNFCCC COP28 in 2023 and be piloting approaches by the UN Convention on Biological Diversity (UNCBD) COP16 in 2024.
  
  
• The EU Parliament agreed on a proposed directive for mandatory human rights and environmental due diligence requirements on companies. This would apply to both EU and non-EU based companies which meet employee and turnover thresholds. Companies’ transition plans will be required to be 1.5°C aligned, among other environmental and social requirements. Non-compliance could result in impacts on directors’ variable remuneration, liability for damages, or sanctions such as ‘naming and shaming’, taking a company’s goods off the market, or fines equivalent to 5% of net global turnover.
  
  
• The European Investment Bank (EIB) issued a digital green bond, believed to be the first in Europe, a SEK1bn 2-year Climate Awareness Bond.
  

Other International

• The Ecuadorian Government issued a USD656m marine conservation-linked blue bond in the largest debt-for-nature conversion on record. USD1.628bn of Ecuador’s international bonds were exchanged for a USD656m loan, at an almost 60% discount, with the Galápagos Marine Bond used to finance the conversion. An estimated USD323m in funding generated over two decades will be directed to marine conservation in the Galápagos Islands.
  
  
• The Global Trends in Climate Change Litigation: 2023 Snapshot shows the number of climate litigation cases rose at a slower rate in the year to May 2023 but that “more than 50%... have direct judicial outcomes that can be understood as favourable to climate action”. The US (1,590) had the highest number of documented cases by far, followed by Australia (130). This report is published annually by the Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy.
  
  
• The Government of Chile issued three new sustainability-linked bonds (SLBs) in June to become the third-largest SLB issuer. These bonds included a new gender-themed key performance indicator (KPI) for women to make up 40% of board members at Chilean companies regulated by the Financial Market Commission (FMC) by 2031.
  
  
• The Canadian Government passed the Fighting Against Forced Labour and Child Labour in Supply Chains Act. 
  

ANZ updates

As a global bank committed to supporting sustainable finance market growth, ANZ is actively working with customers to help them transition to net zero emissions by 2050. ANZ’s sustainability highlights for the quarter include the below.

Research and Publications

• ANZ Chief Economist, Richard Yetsenga, discusses how climate brings a productivity challenge in Australia.
  
  
• ANZ published its Hong Kong Sustainable Finance Market Handbook, focussing on Hong Kong’s sustainable finance market development and the outlook for 2023 and beyond. We expect green and sustainable debt raised in Hong Kong to increase by around 4% y/y to USD88bn in 2023.
  
  
• New research commissioned by ANZ and the Energy Efficiency Council (EEC) shows energy efficiency and electrification together can deliver 40% of Australia’s emissions reductions, at low cost. See the full report, Putting Energy Efficiency to Work, and accompanying podcast, part 1 and part 2.
  
  
• ANZ’s Dean Spicer, Head of Sustainable Finance New Zealand, outlines why we need to focus on building for the future and how to incorporate nature.
  
  
• There is currently excess supply of Australian carbon credit units (ACCUs). But ANZ Research expects demand in the Australian carbon market to rebound from H2 2023, pushing prices higher, as facilities act on their obligations under new Safeguard Mechanism legislation which took effect from 1 July 2023.
  
  
• Australia’s greenhouse gas emissions in calendar 2022 were 24.7% below those for the year ended June 2005. Under the Paris Agreement, Australia has a target to reduce annual emissions by 43% by 2030, relative to June 2005 levels.
  
  
• Nature positive is the new net zero: while climate change and emissions reductions targets have so far taken centre stage in the consideration of organisational environmental risks, biodiversity protection is now becoming just as significant. ‘Nature positive’ refers to business and economic activities that contribute to the reversal of biodiversity loss and restoration of ecosystems. 

Sustainability News

• ANZ Institutional achieved stellar results in the 2023 Peter Lee survey (Peter Lee Associates Large Corporate & Institutional Relationship Banking Survey, Australia), including:
  
  
  • #1 market leader in ESG/sustainable finance
    
  • #1 for citations as lead ESG/sustainable loan provider
    
  • #1 for citations as an ESG/sustainable finance adviser 
    
  • #1 for advice and insights for ESG and sustainable finance (against four domestic majors)
    
    
• ANZ held its ESG forum on 19 June, providing investors an update on ANZ’s approach to key ESG issues and progress on ANZ’s strategy to improve the financial wellbeing and sustainability of customers, with an opportunity for questions. See the investor presentation and reference pack, speeches, Q&A transcript, and webcast.
  
  
• ANZ and FinanceAsia held a Roundtable with clients across Hong Kong, Singapore, Sydney, Auckland and Wellington, bringing together borrowers and investors from across the region.
  
  
• ANZ announced a range of new senior appointments to its global sustainable finance team, to help meet increasing customer and investor demand as the Bank continues to support customers in the transition to net zero, both in our home markets and offshore, particularly in the UK and USA.

Sustainability events and key dates

Recent
 

Upcoming in 2023