A form of ESG debt that’s become increasingly controversial over the past year may now be facing a marked slowdown in growth as fears mount that such products could expose issuers to potential legal risks.
So-called sustainability-linked bonds -- which typically see issuers pay a penalty if they miss pre-determined environmental, social or governance goals -- are set to lose their dominance in ESG sales in the near future, according to analysts at Barclays Plc. That’s as investors question SLBs’ sustainability claims while issuers start to analyse potential litigation risks, they said.
“SLBs have lost their mojo,” analysts including