Sustainable Finance Round Up: March 2023

By: Bridget Realmuto LaPerla

April 12, 2023 - 2 minutes
A woman surrounded by green landscape in the city.

Our Monthly Round Up Series delivers clients with digestible trends and take-aways on sustainable debt market movement.

Market Musings

In a month dominated by volatility and risk-off sentiment, global ESG volumes fell to US$100B for March but remained relatively resilient, experiencing a 17% decline YoY while the broader market fell 28%. As issuers returned to the market, green bonds remained the product of choice for the month, representing 60% of ESG issuance. Notably, this month saw net-outflows from ESG and sustainability themed ETFs with such fund flows dropping by US$3.7B.4

Canada's Green Agenda

Taxonomy Roadmap Report:

The Sustainable Finance Action Council (SFAC) published the roadmap report, outlining recommendations for the design and implementation of Canada's green and transition taxonomy.

  • Clarity on Green & Transition Labels: The roadmap report provides initial guidance on the types of activities that are expected to be considered 'green' or 'transition' and will over time endeavour to include more specific thresholds and inclusion criteria.
  • Building Investor Confidence in 'Transition': Canada's proposed taxonomy would support investor confidence in the transition label, helping raise the $C115B in annual green and transition financing Canada estimates is needed to meet its 2030 and 2050 climate goals.

2023 Federal Budget:

The budget unveiled over C$70B in clean tech and energy investments through 2035 to keep Canada competitive in the global transition. Largely via tax credits, the plan aims to support renewable electricity growth in Canada and investment in broader decarbonization technologies such as clean hydrogen and carbon capture, utilization and storage.

  • U.S. IRA Competition: The new budget promotes investment in clean energy infrastructure to compete in the international 'green economy' and respond to U.S. incentives from the Inflation Reduction Act (IRA).
  • Role of Private Capital: Canada's budget is designed to attract the private capital investment needed to decarbonize Canada's economy, while the proposed taxonomy will help to develop a credible transition finance market providing reliable sources of capital to companies with transition plans.

Source: TD Securities, Bloomberg, The Globe and Mail, Government of Canada

Pie chart showing top issuing sustainable debt sectors in March 2023

TD Securities' ESG Solutions

TD Securities' ESG Solutions team is the centralized ESG expert resource, delivering financing advisory services, thematic and investor insights, and carbon markets solutions to help our clients reach their goals.

The views or opinions expressed herein represent the personal views of the writer and do not necessarily reflect the views of TD Securities or its affiliates.

This material is intended to provide commentary on the market for commodities discussed herein.

Not Advice: The information contained in this material is for informational purposes only and is not intended to provide professional, investment or any other type of advice or recommendation, or to create a fiduciary relationship. Neither TD Securities (USA) LLC (“TD Securities USA”) nor any of its affiliates (collectively, “TD”) makes any representation or warranty, express or implied, regarding the accuracy, reliability, completeness, appropriateness or sufficiency for any purpose of any information included in this material. Certain information may have been provided by third-party sources and, while believed to be reliable, has not been independently verified by TD, and its accuracy or completeness cannot be guaranteed. You should not make an investment decision in reliance on this material, which is intended to provide only brief comments on the topics addressed, and is based on information that is likely to change without notice.

Not Securities or Derivatives Research: This material has not been produced, reviewed or approved by TD’s securities or derivatives research departments. The views of the author may differ from others at TD, including TD securities or derivatives research analysts.

Not Independent: The views expressed in this material may not be independent of the interests of TD. TD may engage in conflicting activities, including principal trading before or after posting this material, or other services involving commodities discussed in this material, or related financial products. TD may have a financial interest in the commodities discussed in this material, including, without limitation, a financial product that references such commodities.

Not An Offer or Solicitation: Nothing contained in this material is, or should be construed as, an offer, a solicitation of an offer or an invitation to buy or sell any commodity, or any financial product that references such commodity, and it is not intended for distribution in any jurisdiction where such distribution would be contrary to law.

Risk of Loss. Transactions in commodities, and financial instruments that reference commodities, involve risk of loss, and are subject to the risks of fluctuating prices. You should weigh potential benefits against the risks. Past performance is no indicator of future performance and the Materials are not intended to forecast or predict future events.

Portrait of Bridget Realmuto LaPerla

Bridget Realmuto LaPerla
Director, ESG Solutions

Portrait of Bridget Realmuto LaPerla

Bridget Realmuto LaPerla
Director, ESG Solutions

Portrait of Bridget Realmuto LaPerla

Bridget Realmuto LaPerla
Director, ESG Solutions

Bridget joined the ESG Solutions team as a Director in July 2022. Based in Boston, she is a published ESG investing specialist with buy- and sell-side experience, providing ESG advice and solutions to corporate and institutional clients. Prior to joining TD, Bridget was the Co-Head of ESG Research at State Street Associates, presenting insights with academic partners and leading the bank's client engagement on ESG market signals. Her research is published in several peer-reviewed journals.

Canada
ESG
Sustainability

Related Content

Share This Article