IDEAS home Printed from https://ideas.repec.org/a/mnb/finrev/v21y2022i4p150-179.html
   My bibliography  Save this article

Regulatory and Market Trends for ESG Bonds and Funds, and Some of the Associated Risks of Sovereigns

Author

Listed:
  • Laszlo Bokor

    (Hungarian Government Debt Management Agency)

Abstract

Promoting the financing of the transition to a sustainable economy is one of today's key issues. However, access to scarce resources is further complicated by a striking new phenomenon: both regulators and investors are becoming increasingly "choosy", as they make their decisions on whom to give money to dependent on circumstances that go beyond green and scientific aspects. It is therefore no coincidence that an increasing number of investment funds are obtaining ESG ratings that formulate exclusion rules for sovereign bonds based on NGO indicators (e.g. civil liberties, level of corruption). If such criteria become an international standard, a sovereign that fails to meet them could be threatened with total exclusion from the green/ ESG market. The aim of this essay is to review the regulatory environment and the market situation through this lens. It is important to note, however, that both legislation and market preferences are in a quickly evolving, amorphous state, and thus continuous monitoring of the conditions is essential.

Suggested Citation

  • Laszlo Bokor, 2022. "Regulatory and Market Trends for ESG Bonds and Funds, and Some of the Associated Risks of Sovereigns," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 21(4), pages 150-179.
    • Handle: RePEc:mnb:finrev:v:21:y:2022:i:4:p:150-179
    as

    Download full text from publisher

    File URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-21-4-e1-bokor.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    green investment; ESG; regulation; bond; market; sovereign; risk;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mnb:finrev:v:21:y:2022:i:4:p:150-179. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Morvay Endre (email available below). General contact details of provider: https://edirc.repec.org/data/mnbgvhu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.