Sustainaweekly - Everything you need to know about carbon pricing
We start by discussing carbon prices and carbon taxes, as carbon prices have soared recently. We answer several questions around this theme. We then follow up with investigating whether there is a relationship between ESG risk ratings and corporate bond prices. And, indeed, our results show that there is! In this publication, we also analyse some of the newly announced SLB Frameworks by corporates, but also from governments. And where do we stand towards the final version of the EU GBS? We have built an overview of the approval process and how the EU plans to have a final version by the end of the summer. Finally, we also explore the impact of a halt in KfW subsidies to German real estate companies.
Economics Theme
We answer five key questions related to the theme “Carbon prices”: Why have prices surged this year? Is a national carbon tax for industry useful? Can carbon taxes play an effective role in other sectors? What is the impact of high carbon prices on the transition? What could be the trend in carbon prices in the coming years?
Strategy Theme
Our analysis shows that Sustainalytics ESG risk rating scores have a statistically significant effect on corporate bond pricing, i.e. better ESG credentials result in lower credit spreads.
ESG Bonds
Vestas announced a new SLB Framework, followed by the Chilean government, who is set to become the first sovereign to issue a SLB. Earlier last week, the government of Singapore also announced it will issue USD 26bn of green bonds until 2030.
Policy and Regulation
ECON has this week received the opinion of ENVI on the proposal for EU Green Bond Standards. Where do we currently stand in the legislature process? And what are the remaining discussion points? We explore these questions in this section.
Company and Sector news
KfW, the German development bank, unexpectedly announced an immediate halt in its subsidies towards energy-efficient houses and refurbishment. We examine what the impact could be for Real Estate companies in the country.
ESG in figures
In a regular section of our weekly, we present a chart book on some of the key indicators for ESG financing and the energy transition.