Bond Penalties Loom for Ever-Larger Group of ESG Issuers (1)

A growing number of firms behind ESG-linked bonds may now be facing financial penalties that would drive up investor returns once triggered.

The development is playing out in the $300 billion market for sustainability-linked bonds, with 19 benchmark issuers having committed to meeting pre-determined performance targets this year. Of those, three will likely miss their targets while a further four issuers only have a 50/50 chance of avoiding penalties, according to an analysis by the Anthropocene Fixed Income Institute.

Five years after the first ever SLB was issued, a growing number of the securities are now bumping up against ...