Empty ESG Pledges Ensure Bonds Benefit Companies, Not the Planet
Sustainability-linked bonds let companies borrow cheaply if they meet ESG targets. A Bloomberg News analysis found those goals are weak.
Bloomberg News analyzed more than 100 SLBs worth almost €70 billion that were sold by global companies to investors in Europe—the most mature market for sustainable finance products—and found that the majority are tied to climate targets that are weak, irrelevant, or even already achieved. The result, researchers say, is that companies are getting something for nothing: Cheaper financing and an enhanced green reputation come without any real effort to deliver on climate goals and no chance of financial penalty.
The SLB market “is broken,” says Krista Tukiainen, head of market intelligence at the Climate Bonds Initiative, a nonprofit that promotes better use of debt for sustainable purposes. “Let’s not kid ourselves that this is moving the needle on climate. It can, but it’s really not right now.”