NEW YORK (PRWEB) OCTOBER 19, 2023
A new report from Arizent, parent company of The Bond Buyer, the leading resource for the public finance community, explores how industry professionals see environmental, social and governance (ESG) factors fitting into the market's future.The findings reveal that increased politicization may be changing or influencing sentiments around ESG in public finance, but the majority of the industry agrees: they want a standard muni ESG language.
Seventy-five percent of all survey respondents say they would like a universal language for ESG, citing that standardization could benefit the muni market by eliminating confusion while alleviating pushback from politicians and issuers. However, they don't agree on how that standard should be set.
"Municipal finance professionals have to keep in mind that ESG initiatives are here to stay," Janet King, Vice President of Arizent Research, says. "It feels more important now than ever for the industry to come together to reach a consensus on a universal muni ESG language."
When asked about increasing politicization, survey respondents provide mixed answers about how it might change issuers' access to capital markets and investors. Forty-five percent of participants anticipate a moderately or significantly negative impact while 43% see a limited impact in either direction. Only 12% expect a positive impact on the industry.
"The creeping negativity may be related to different perceptions of ESG as political concerns have become more prominent, with some states writing legislation and enacting laws prohibiting the use of ESG in the public finance market," says Lynne Funk, Executive Editor for The Bond Buyer and author of the report. "These and other market challenges have pushed ESG into becoming a hot-button issue that is at once viewed as vital to the sustainability and growth of the muni market and also an ill-defined, costly, politically driven distraction."
Even if politics have dampened some belief that ESG can generate industry growth, nearly half of all respondents expect ESG to have a positive impact on growth over the next five years, while just 24% say it would be a limiting factor.
The report and its findings, sponsored by Assured Guaranty, are being presented during a panel discussion at The Bond Buyer's CALIFORNIA PUBLIC FINANCE conference, taking place October 18-20, 2023 in San Francisco, where investors, issuers and other industry experts will weigh in on the critical ESG issue.
To read full details of the report, including which elements of ESG — environmental, social or governance — the sector considers most important, download the full report here.
Research Methodology
This research was conducted by Arizent, parent company of The Bond Buyer, was conducted online in August 2023. 102 municipal market participants completed the survey; 41% identified themselves from the sell side, 18% from the buy side, 16% as issuers and 25% from other areas of the sector.
For more information on this survey or other Arizent research, contact:
Janet King
Vice President, Research
Arizent
janet.king@arizent.com
M 207-807-4806
About The Bond Buyer
The Bond Buyer is the only independent information resource serving the entire municipal finance community. Its comprehensive paid-subscription package of news, analysis and data is unique in the industry, serving a complete spectrum of senior industry professionals, through its website, e-newsletters and alerts, and daily print edition.
About Arizent Research
Arizent delivers actionable insights through full-service research solutions that tap into its first-party data, industry SMEs and highly engaged communities across banking, payments, mortgage, insurance, municipal finance, accounting, HR/employee benefits and wealth management. Arizent has leading brands in financial services, including American Banker, The Bond Buyer, Financial Planning and National Mortgage News, and in professional services, such as Accounting Today, Employee Benefits News and Digital Insurance. For more information, please visit www.arizent.com.
About Assured Guaranty
Assured Guaranty is the leading provider of financial guaranty insurance. The firm guarantees timely payment of scheduled principal and interest when due on municipal, public infrastructure and structured financings. It also participates in the asset management business through its ownership interest in Sound Point Capital Management, LP.