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Sustainable finance deals to continue to grow in 2022

Sustainable finance deals will continue their rapid growth next year, backed by the adoption of environmental, social and corporate governance (ESG) considerations when making asset allocation decisions, according to asset managers and bankers. Amy Lo, Asia-Pacific co-head of UBS Wealth Management and CEO of UBS Hong Kong, said deal volumes would certainly continue to grow in 2022, driven by the growing need for businesses to comply with ESG requirements and raise money to support risk mitigation and tap into new opportunities. The issuances of green, social, sustainable and sustainability-linked bonds, collectively known as ESG-labelled bonds, in Asia ex-Japan reached USD331bn as of December 23, up 32% than in the whole of 2020, Refinitiv data showed. In the global scene, ESG-labelled bonds hit USD1tn this year, said Sam Morton, head of European investment-grade fixed-income research at Invesco. Morton said that following its 76% growth in the first 10 months of 2021, even a slower projected 50% growth rate would bring the issuance in 2022 to USD1.5tn, likely cementing the segment as a core holding in fixed-income portfolios.

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