ESG Debt Boom Sparks Worry Firms Get Away With Bare Minimum
- Some sustainability-linked bond goals lack ambition: investors
- Buyers may overlook modest targets in hunt for ESG assets
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The credibility of a burgeoning class of bonds linked to environmental goals is being threatened by a lack of ambition in companies’ targets and the willingness of investors to overlook those shortcomings.
The market for these so-called sustainability-linked bonds is on track to expand 13-fold this year, to more than $120 billion, according to JPMorgan Chase & Co. But critics say that many companies are linking their bonds to targets that they can easily achieve, and in some cases to goals they’ve virtually already met. Investors, meanwhile, hungry for assets they can call “green,” are willing to turn a blind eye.