DZ BANK Sustainability Day
22 September 2020
DZ BANK’s Headquarters in Frankfurt/Main
2020 marks the beginning of a decade of urgent sustainability action. For too long finance was the missing link on the sustainability agenda. This has fortunately changed. The capital market plays a pivotal role in allocating private capital in the "right direction". Hence, the 2020s will be the decade of Sustainable Finance. The race for the necessary trillions to close the sustainable funding gap has recently begun.
With an estimated volume of more than 100 trillion US Dollar, the global fixed income market plays a key role in this transformation process. In recent years, the labelled bond / SSD market has become more colourful, i.e. it has further expanded beyond Green Bonds. We have seen more issuance with a varied set of labels and proceed allocation models, especially in the corporate funding world. Target-linked bonds / SSDs have seen the light of day. In addition, Transition Bonds / SSDs have the potential to become a new asset class as we have to realise that a decarbonized world will not be reached by solely focusing on project categories which are already “green / sustainable”. And even in times of the COVID-19 pandemic Sustainable Bonds have proved themselves a suitable financial instrument to raise funds for mitigating its the negative economic and social impact of the virus.