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ESG Spread to $55 Trillion Market Risks Accounting Headache (1)

July 25, 2022, 10:19 AM

The spread of ESG labels into the $55 trillion market for short-term debt is creating new accounting challenges for those keeping track of how much good green finance is actually doing.

The Climate Bonds Initiative, an influential standard-setter for ethical debt, just released guidance on how to apply ESG to products with maturities of less than a year, such as commercial paper, export letters of credit and repurchase agreements. It concluded that double-counting -- where a single green investment is counted more than once among various parties -- is unavoidable.

While the CBI says this is a necessary byproduct of ...