The market for green, social and sustainability bonds has been growing rapidly over the past few years, reaching a total of $1.4 trillion in issuance, including $490 billion for 2020 alone. For the time being, the Gulf region accounts for only for a tiny part of it. However, this is about to change, in part thanks to the recent creation of a new financial instrument: The sustainability-linked bond.
Green, social and sustainability bonds are all "use-of-proceeds" financial instruments. While these bond formats provided investors with clarity and transparency in terms of what is being financed or refinanced with the proceeds raised from their issuance, some issuers perceive the use-of-proceeds structure as too restrictive and have stayed away from this market.
To understand why this is the case, we need to take a closer look at the structure of these instruments. To offer a green/social/sustainability bond, an issuer needs to have some existing/planned projects deemed eligible for such financing: Environmental projects for green bonds, social projects for social bonds and a mix of both for sustainability bonds.
The focus of these instruments is on the issuer’s eligibility as of now, regardless of their ambition for the future. Consequently, some companies that would like to embark on the energy transition pathway or improve their sustainability credentials over time may not fulfil the necessary conditions for issuing these bonds.
This is problematic because the decarbonisation of the economy cannot happen without transforming carbon intensive or otherwise “unsustainable” parts of the economy. This transformation will require significant financial flows, but these are unlikely to be channelled through use-of-proceeds bond formats. This is particularly true for the Gulf region, as it is well-positioned to play a leading role in energy transition but for now only accounts for a fraction of use-of-proceeds bonds issued.
Sustainability-linked bonds (SLBs) were developed to address these issues with the aim of opening the green and sustainable bond market to new issuers. Instead of defining eligibility in terms of existing assets and activities like the use-of-proceeds bonds do, SLBs are general corporate purpose instruments that focus on the issuer’s future trajectory towards the achievement of pre-determined environmental, social and governance objectives.
This means that any issuer can potentially issue SLBs regardless of how sustainable they currently are – what matters is the credibility of their commitment to future improvements.
But it takes two to tango. SLBs can only succeed in the market if investors are willing to buy them. To gauge investors’ appeal and any concerns, Natixis undertook a survey of 40 global investors with a combined $20tn of assets under management.
Almost nine out of 10 surveyed investors said they had an appetite for SLBs, with 40 per cent willing to add them to conventional portfolios and 66 per cent in their ESG investments.
However, some investors also raised concerns, with more than half citing the issue of "greenwashing", in which some companies or products claim they are more sustainable than the evidence suggests. These concerns need to be addressed during the structuring phase of each SLB by setting out ambitious sustainability targets whose evolution over time can be used to assess progress.
Another concern among investors was a lack of comparability in terms of the targets being set. As a rule, key performance indicators should be robust, material and holistic to achieve the predefined objectives of the issuance. The ambition of KPIs should be embedded in a long-term strategy approach rather than just focusing on short-term deliverables. Moreover, all investors expect impact reporting, including views on the levers actioned to achieve targets.
In terms of the areas of interest, environmental indicators are broadly accepted as a method to structure SLBs, but there is also growing interest in social themes, particularly health and safety topics, which were identified by 70 per cent of respondents.
Growth of the SLB market occurred after June 2020 when the International Capital Markets Association (ICMA) released Sustainability Linked-Bonds Principles (SLBPs), voluntary guidelines that define SLBs as a type of bond in which the financial and/or structural characteristics can vary depending on whether the issuers achieve predefined sustainability or ESG objectives. Following the ICMA's guidelines, more than 45 issuers raised financing through this format, reaching a total of almost $20bn of issuances as of March 2021.
Our conviction is that use-of-proceeds instruments (green, social, and sustainability bonds) and SLBs will coexist in the bond market as each appeal to different types of issuers. This does not mean that one of these bond formats will be greener or more credible than another, they simply take a different perspective and address different sets of investor expectations. Use-of-proceeds bonds provide investors with clarity about what is being financed, but SLBs offer a more forward-looking and holistic view of an issuer's profile.
Radek Ján is an infrastructure and green bonds specialist at Natixis, which is a member of The Gulf Bond and Sukuk Association
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
WITHIN%20SAND
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
UFC Fight Night 2
1am – Early prelims
2am – Prelims
4am-7am – Main card
7:30am-9am – press cons
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
MATCH INFO
What: Brazil v South Korea
When: Tonight, 5.30pm
Where: Mohamed bin Zayed Stadium, Abu Dhabi
Tickets: www.ticketmaster.ae
The biog
Name: Abeer Al Bah
Born: 1972
Husband: Emirati lawyer Salem Bin Sahoo, since 1992
Children: Soud, born 1993, lawyer; Obaid, born 1994, deceased; four other boys and one girl, three months old
Education: BA in Elementary Education, worked for five years in a Dubai school
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The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
Brief scoreline:
Al Wahda 2
Al Menhali 27', Tagliabue 79'
Al Nassr 3
Hamdallah 41', Giuliano 45 1', 62'
UAE currency: the story behind the money in your pockets
Overview
What: The Arab Women’s Sports Tournament is a biennial multisport event exclusively for Arab women athletes.
When: From Sunday, February 2, to Wednesday, February 12.
Where: At 13 different centres across Sharjah.
Disciplines: Athletics, archery, basketball, fencing, Karate, table tennis, shooting (rifle and pistol), show jumping and volleyball.
Participating countries: Algeria, Bahrain, Comoros, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Saudi Arabia, Sudan, Syria, Tunisia, Qatar and UAE.
Essentials
The flights
Emirates and Etihad fly direct from the UAE to Geneva from Dh2,845 return, including taxes. The flight takes 6 hours.
The package
Clinique La Prairie offers a variety of programmes. A six-night Master Detox costs from 14,900 Swiss francs (Dh57,655), including all food, accommodation and a set schedule of medical consultations and spa treatments.
Juvenile arthritis
Along with doctors, families and teachers can help pick up cases of arthritis in children.
Most types of childhood arthritis are known as juvenile idiopathic arthritis. JIA causes pain and inflammation in one or more joints for at least six weeks.
Dr Betina Rogalski said "The younger the child the more difficult it into pick up the symptoms. If the child is small, it may just be a bit grumpy or pull its leg a way or not feel like walking,” she said.
According to The National Institute of Arthritis and Musculoskeletal and Skin Diseases in US, the most common symptoms of juvenile arthritis are joint swelling, pain, and stiffness that doesn’t go away. Usually it affects the knees, hands, and feet, and it’s worse in the morning or after a nap.
Limping in the morning because of a stiff knee, excessive clumsiness, having a high fever and skin rash are other symptoms. Children may also have swelling in lymph nodes in the neck and other parts of the body.
Arthritis in children can cause eye inflammation and growth problems and can cause bones and joints to grow unevenly.
In the UK, about 15,000 children and young people are affected by arthritis.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Killing of Qassem Suleimani
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Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The five pillars of Islam
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The%20specs
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Killing of Qassem Suleimani
