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The ESG Phenomenon - Citigroup
Editorial Staff
10 November 2021
Citigroup Highlight transactions include Alibaba Group’s $5 billion four-part offering in February, which included a 20-year sustainability tranche – its debut sustainable capital markets transaction, said in a statement. From the hardware sector, SK hynix issued a $2.5 billion bond in January with a 10-year green tranche. Citigroup also led a $3 billion sukuk – Shariah-compliant debt – for the Republic of Indonesia in June, which included a 30-year “green tranche” – which it said was the longest-ever green offering in Islamic format. A decade ago, the environmental, social and governance-themed (ESG) investing market was led by niche investors with assets under management not exceeding $5 billion, according to market estimates. Citigroup said that globally, assets under management in ESG formats exceed $30 to $40 trillion.
The US banking group said it has clocked up $40 billion in fundraising for Asia-Pacific clients to support their sustainable financing needs – a rise of more than 500 per cent from the same period in 2020.
The bank said issuers of debt can often raise cheaper financing by adopting green bonds, obtaining favourable pricing – a “greenium.” Issuers are taking advantage of higher oversubscription levels for these transactions, especially in busy or difficult markets.