This blog post, co-authored by Isabel Montojo, Associate at HPL; Olga Cantillo, CEO Bolsa de Valores de Panama; and Susana del Granada, Environmental and Social Officer IDB Invest, explores how disclosure and transparency on the management of ESG factors provides companies with added value, as many investors are building investment portfolios with ESG factors where only companies that meet certain criteria are eligible.
(Image Source: Schroders)

This blog post, co-authored by Isabel Montojo, Associate at HPL; Olga Cantillo, CEO Bolsa de Valores de Panama; and Susana Del Granado, Environmental and Social Officer IDB Invest, explores the role of Environmental, Social, and Governance (ESG) disclosure in the emerging markets.

The point of ESG principles is that they should be integrated into company strategy, for the benefit of shareholders and stakeholders, including investors in emerging markets. Non-financial risk disclosure is following the same historical trend as the financial risk report. Anyone in the know on financial news has heard about environmental, social, and corporate governance (ESG) factors, and how they are promoted at the highest level. But, from emerging markets and in the midst of a pandemic, there is a question to answer: what good are they?

(Image Source: IDB Invest)

The COVID-19 pandemic has resulted in an unprecedented situation that is severely impacting the daily lives of millions of people globally. In addition to health repercussions, economies and livelihoods all over the world are being challenged by changes in both supply and demand. Governments have scrambled to prepare fiscal stimulus packages and inject liquidity to keep economies afloat.

2020 has seen an explosion of fixed-income instruments, such as pandemic bonds and COVID-19-response bonds, as well social and sustainability bonds with coronavirus response use of proceeds. In order to uncover some market trends regarding these new instruments, HPL collected a representative sample of 100 thematic transactions representing USD 165 bn of social, sustainability, and other coronavirus related bonds issuances.

Biodiversity is a key element to our natural world and the increased agitation of ecosystems in the last decade has posed a significant threat on natural areas and their vast contributions. While most conservation efforts have been funded solely by philanthropic efforts and grants in the past, there has been an emergence of innovative conservation finance instruments. Conservation finance is an emerging field that can unlock private capital and help to continuously scale conservation projects in ways that grants and donations cannot. In this thought leadership, we discuss examples of conservation finance instruments, the different stakeholders involved, and the common themes we have observed in this space.